• Investing
  • Stock
  • Economy
  • Editor’s Pick
Portfolio Performance Today
Stock

Dow Jones to rise as fear and greed index slips: needs to hit $38,900 first

by April 4, 2025
by April 4, 2025

The Dow Jones Industrial Average (DJI) has plummeted this week as the US economic risks jumped following Donald Trump’s Liberation Day speech. It plunged to a low of $40,545 on Thursday, its lowest level since September 11. It has crashed by 10% from its highest point this year as it moved into a correction. 

Fear and greed index has plunged

The Dow Jones crashed as investors panicked and either sold their shares or stayed in the sidelines. 

A good example of this is the performance of the fear and greed index has plunged to the extreme fear zone of 8. The last time the index was this low was during the onset of the COVID-19 pandemic. 

All sub-indices of this index have moved to the extreme fear zone. The market momentum indicator, which compares the S&P 500 index with the 125-day moving average, has dropped to the extreme fear zone. 

Similarly, the stock price strength has crashed as the number of companies trading at their 52-week lows has risen. The stock price breadth, which looks at the McClellan Volume Summation Index has also plummeted. Other gauges like put and call options, market volatility, safe haven demand, and junk bond demand have moved to the extreme zone. 

The VIX index, which is widely seen as the fear gauge in Wall Street, has jumped to $30, its highest level since August 2024. It has risen by over 135% from its lowest point in December last year.

Is the rising fear a good catalyst?

A common saying in the stock market recommends buying when everyone is fearful, and selling when everyone is greedy. 

This saying has worked relatively well in the past as bull markets typically start when the fear and greed index is in the deep red zone. For example, the Dow Jones and the S&P 500 index started a strong comeback in March 2020 when the fear gauge plummeted.

Numerous catalysts may push the Dow Jones Index higher in the coming months. First, Donald Trump has already unveiled his tariffs against all countries bringing goods to the United States.

The next stage will be negotiations with other countries. He has already hinted that he will be willing to take some “phenomenal’ offers from countries like China. For example, he has said that he may decide to lower tariffs if China agrees to a TikTok deal. 

Trump is also under pressure from the business community to offer some exclusions. In a statement, the Business Roundtable said:

“However, universal tariffs ranging from 10-50% run the risk of causing major harm to American manufacturers, workers, families and exporters. Damage to the U.S. economy will increase the longer the tariffs are in place and may be exacerbated by retaliatory measures.”

The Dow Jones index may also rebound as the Federal Reserve intervenes if it believes that the economy was moving to a recession. While US inflation is high, the Fed may decide that a rate cut will be necessary to supercharge economic growth.

Dow Jones Index technical analysis

Dow Jones chart by TradingView

The daily chart shows that the Dow Jones Index has crashed in the past few months. This crash happened after it formed a double-top chart pattern. It has also moved below the 50-day and 200-day moving averages, meaning that a death cross may happen soon. 

The distance between the double top and the neckline is about 7%. Therefore, measuring the same distance from the neckline gives the next Dow Jones target at $38,900, the lowest level since August 7. 

Therefore, there is a likelihood that the index will drop to that target and then resume the uptrend.

The post Dow Jones to rise as fear and greed index slips: needs to hit $38,900 first appeared first on Invezz

0 comment
0
FacebookTwitterPinterestEmail

previous post
Top 3 Nasdaq 100 stocks rising as it moves into a correction
next post
2 cannabis stocks to sell, 1 contrarian buy: Tilray, Canopy Growth, Curaleaf

Related Posts

Here’s why the Alibaba stock price crashed in...

May 19, 2025

Wix stock price is overvalued ahead of earnings:...

May 19, 2025

Ryanair share price forecast after revealing a $750...

May 19, 2025

Asian markets open: Nikkei slips 0.6%, region lower;...

May 19, 2025

Moody’s downgrades US credit rating: what to expect...

May 19, 2025

XPeng stock price analysis: Is this Nio rival...

May 19, 2025

Europe markets open: Stoxx 600 down 0.4% on...

May 19, 2025

SCHD ETF analysis: 2 catalysts to move the...

May 19, 2025

CoreWeave stock price analysis: is it the next...

May 19, 2025

Nebius Group stock price eyes a 45% surge...

May 19, 2025

Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.

By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

Recent Posts

  • When Pol Pot Read a Book on Marx

    May 19, 2025
  • Could Adopting Collectivist Activism Undo Classical Liberalism?

    May 19, 2025
  • Asian markets close: Nikkei, Kospi down; Sensex closes 271 pts lower

    May 19, 2025
  • Qualcomm unveils AI chips for data centres with Nvidia compatibility

    May 19, 2025
  • Best crypto to buy now: Bitcoin Pepe leads meme coin frenzy

    May 19, 2025
  • JPMorgan cuts Netflix rating, citing balanced risk-reward post-rally; stock falls

    May 19, 2025

Editors’ Picks

  • 1

    Walmart earnings preview: What to expect before Thursday’s opening bell

    February 20, 2025
  • 2

    Meta executives eligible for 200% salary bonus under new pay structure

    February 21, 2025
  • 3

    New FBI leader Kash Patel tapped to run ATF as acting director

    February 23, 2025
  • 4

    Anthropic’s newly released Claude 3.7 Sonnet can ‘think’ as long as the user wants before giving an answer

    February 25, 2025
  • 5

    Elon Musk says federal employees must fill out productivity reports or resign

    February 23, 2025
  • 6

    Nvidia’s investment in SoundHound wasn’t all that significant after all

    March 1, 2025
  • 7

    Cramer reveals a sub-sector of technology that can withstand Trump tariffs

    March 1, 2025

Categories

  • Economy (1,155)
  • Editor's Pick (118)
  • Investing (165)
  • Stock (741)
  • About us
  • Contact us
  • Privacy Policy
  • Terms & Conditions

Copyright © 2025 Portfolioperformancetoday.com All Rights Reserved.

Portfolio Performance Today
  • Investing
  • Stock
  • Economy
  • Editor’s Pick
Portfolio Performance Today
  • Investing
  • Stock
  • Economy
  • Editor’s Pick
Copyright © 2025 Portfolioperformancetoday.com All Rights Reserved.

Read alsox

Short US30: bearish momentum strengthens as trade...

April 3, 2025

Hang Seng, Nifty lead Asian markets higher...

May 12, 2025

De minimis gone: how a little rule...

May 2, 2025