Dow Jones Technical Analysis: Index Sliding Lower – 08 March 2022
The Dow Jones Industrial Average declined sharply during its recent trading at the intraday levels, to record losses for the third consecutive session, by -2.37%. It lost the index towards -797.42 points, to settle at the end of trading at the level of 32,817.39, after it declined in Friday’s trading it reached -0.53%.
The Dow Jones Industrial Average closed sharply lower on Monday, posting its lowest close in 2022, ending in correction territory for the first time in more than two years, with a close below 33,119,685 the level needed to signal a 10% drop from the high.
All 30 components of the index declined except for only four stocks that ended in the green with slight gains, with the stocks declining the most by percentage. American Express Co. by -7.99%, and Boeing Co. by -6.45% and Nike Inc. Cl B by -5.14%.
The last entry into correction territory for the Dow was on February 27, 2020, when the index extended its losses to enter the bear market phase, which is defined as a decline of at least 20% from the last peak, during the height of the selling fueled by fears epidemic two years ago.
Meanwhile, the amount of credit used by consumers in January grew by a meager $6.8 billion, the smallest increase in a year, indicating that households cut borrowing sharply in early 2022.
Technically, the bearish corrective trend dominates the index’s trading in the short term, with it being affected by the breaking of an ascending sub-trend line earlier. This is shown in the attached chart for a (daily) period, with the continuation of negative pressure for its trading below the simple moving average for the previous 50 days, to break its decline.
The index’s decline came despite the positive signs of the relative strength indicators, which indicates the dominance of the selling forces in the market, which increases the negative pressures on its upcoming trading.
Therefore, our expectations indicate a further decline for the index during its upcoming trading, as long as its stability below the level of 33,271.93, to target the first important support levels at 32,071.40.