- The Dow Jones Industrial Average continued to decline in its recent trading at the intraday levels, to record new losses in its last sessions.
- It fell by 0.32%, losing about 93.91 new points, to settle at the end of trading at the level of 29,202.89, after its decline during its trading on Friday by 1.15%. The index gained 1.99% during last week's trading, after trimming its gains after falling in the last three sessions of the week.
Other computer chip companies fell on Monday, after the US administration on Friday issued rules aimed at blocking some chip exports to Chinese companies, so as not to conflict with US national security and foreign policy interests.
Meanwhile, despite growing concerns by several economists and analysts that raising Fed rates could increase unemployment, Chicago Fed President Charles Evans continued to support the central bank's attempt to bring down inflation, saying that while he appeared "optimistic" it was "optimistic". He thinks he can do so "while also avoiding stagnation".
The Fed official added that the FOMC would need to raise the federal funds rate above 4.5% by early 2023 and keep it there for a while to ease inflation.
While the headline annual inflation rate for September may fall below the 8% mark for the first time since February, the core level is likely to be 6.6%, the hottest reading since 1982, some economists said.
Dow Jones Technical Analysis
Technically, the index suffers from the formation of what is known as negative divergence, after the relative strength indicators reached areas that are highly saturated with purchases.
This happened in an exaggerated manner compared to the movement of the index, with the start of the influx of negative signals from them, considering the control of the short-term bearish corrective trend along a slope line. It is shown in the attached chart for a (daily) period, with the negative pressure continuing to trade below the simple moving average for the previous 50 days.
Therefore, our negative expectations surrounding the index remain in effect, as we expect it to continue falling. This is especially true if it stabilizes below the level of 29,653.30, to target the support level of 28,402.50.
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