At the annual meeting of the central bank in Jackson Hole, Federal Reserve Chairman Powell emphasized the need to suppress inflation. The expectation of interest rate hikes triggered a decline in U.S. stocks, and the Dow Jones index fell by a thousand points. Technical indicators suggest that the trend may continue to decline.
After the earnings season, the bullish factors have been fully digested, and the upward momentum of the US stock market rebound has begun to weaken. Investors hope to re-examine the Fed’s monetary policy from the annual meeting of the Jackson Hole Central Bank.
After the FOMC meeting in July, the market expects the Fed to gradually slow down the pace of interest rate hikes, which constitutes the basis for the rebound of US stocks in July and August. Although US inflation has fallen, Fed officials have concentrated their support for “prioritizing addressing inflation”, and US stocks are bullish Be vigilant. Finally, at the annual Jackson Hole central bank annual meeting, Powell’s tough attitude aroused the worries of the US stock market bulls, and the Dow Jones index fell by a thousand points.
Chart from Tradingview
It can be seen from the daily chart that the Dow Jones index has fluctuated between 30,000 and 37,000 since 2021, and this round of rebound started at the 30,000 mark, marking that a fall below this line in the market outlook will trigger more intense selling. The rebound since 30,000 has been quite strong, and it encountered resistance after hitting 33,800-34,000. Here is the downtrend line of 37,000, and the index began to show signs of reversal.
The decline on Friday was obviously enlarged and reversed. The 33000 line was the previous support and resistance point. The downward penetration here confirmed the short-term breakout, and confirmed the resistance strength of 33800-34000 in the overall trend. The Dow trend entered a correction in the short and medium term. , a further drop below 32,000 confirms a return to the decline, returning to the 32,000-30,000 area.
The trend of U.S. stocks will become the most critical factor affecting the trend of financial markets in the future. Risk sentiment is optimistic when U.S. stocks rebound, and risk sentiment is pessimistic when U.S. stocks fall. It is expected that the rebound of the Dow Jones index will weaken, and it will break below 32000 after confirming the resistance of 33000-32800.
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