Recovery expected as DJIA futures up 400 points

U.S stock market set to open higher today after worst daily drop since March. Yesterday, DJIA down 1,809 points which erased all previous week gains. The index futures seems ready for recovery after its stage rally of 600 points earlier today. However, the index futures currently off the high and traded up 400 points.

We might see a higher opening in today’s trading session but might be ready for another drop too. Traders and investors currently will weigh on the new coronavirus cases after reopening. It seems the number of infections increased significantly which might derail the reopening effort.

Asian & European Stock market

The Asian stock market continue lower today. Japan stock market down 167.43 points (-0.75%) to 22,305.48, China stock market down 1.16 points (-0.04%) to 2,919.74 and Australia ASX 200 down 112.80 points (-1.89%) to 5,874.80. The European stock market turn higher today but off high. DAX Germany up 0.42%, FTSE UK up 0.73%, Euro STOXX 600 up 0.72%

Technical Analysis

Dow Jones Industrial Average (INDU)

A major bearish setback happened in DJIA yesterday. The index fell sharply from the daily SMA 200 and closed near the daily SMA 100. Today, there might be a bullish correction but we think the index will resume its bearish movement after the correction ended.

It is better to observe today’s closing level, at the current time DJIA futures up 414 points, lower than previous +600 points.

Illinois tool works Inc (ITW)

ITW share prices dropped sharply, following the downward movement of the DJIA index. The share prices closed near the daily SMA 200 which might become the support level for the share prices to bounce. However, if the global stock market continues its weakness then we might see breakout below the level.

If breakout and close below the SMA 200 happen then traders will prepare for further weakness toward $160.00 and $150.00.