Dow Jones Holds 50% Fibonacci Retracement
The Dow Jones continues to hold above the 50% Fibonacci retracement level which is the midpoint between the 2009 global financial crisis low and the all-time high made in February of this year. Stocks saw early gains today as the Federal Reserve announced unlimited Quantitative Easing to prop up banks and the financial system, but then prices retreated as US leaders failed to pass the coronavirus economic relief bill and pushed the next vote back to Friday.
Traders will be hard-pressed to defend the 50% retracement level with 4 more days of waiting until the next vote, which in the meantime we will likely see a further deterioration of the coronavirus pandemic in the U.S. with a rising case count, more deaths and even more states going into lockdown putting further stress on the U.S. economy, businesses and an inevitable continued rise in unemployment. The next round of unemployment numbers by the Bureau of Labor Statistics is due out on Friday, and the projected number is 2,000,000 layoffs which will be the worst monthly number ever recorded. A number this high is most certainly to spook traders ahead of Friday’s vote on the economic relief bill, which cold give our politicians the motivation that they need to pass the bill.
Short-term view remains bearish.
Traders will be hard-pressed to defend the 50% retracement level with 4 more days of waiting until the next vote, which in the meantime we will likely see a further deterioration of the coronavirus pandemic in the U.S. with a rising case count, more deaths and even more states going into lockdown putting further stress on the U.S. economy, businesses and an inevitable continued rise in unemployment. The next round of unemployment numbers by the Bureau of Labor Statistics is due out on Friday, and the projected number is 2,000,000 layoffs which will be the worst monthly number ever recorded. A number this high is most certainly to spook traders ahead of Friday’s vote on the economic relief bill, which cold give our politicians the motivation that they need to pass the bill.
Short-term view remains bearish.