The Dow Jones Industrial Average declined during its recent trading at the intraday levels, to break with a series of gains that continued for five consecutive sessions. It recorded losses in its last sessions by -0.50%, to lose the index towards -171.69 points. It then settled at the end of trading at 33,980.33, after rising in trading on Tuesday, by 0.71%, to reach this rise to its highest level since late April.

Minutes released from the minutes of the Federal Reserve’s July meeting showed that members of the Federal Reserve’s Monetary Policy Committee decided at their meeting last month that they would continue to increase benchmark lending rates until inflation fell significantly. They are using incoming macroeconomic data to determine how high rates will go.

In an effort to combat hot inflation, the Federal Open Market Committee has raised interest rates at each of its meetings since March, including two back-to-back increases of 75 basis points at its last two meetings, with more increases expected in upcoming meetings. However, despite these measures, inflation remains at its highest levels in four decades.

Economic Outlook

US retail sales were flat in July, less than an expected 0.1% increase in a Bloomberg poll and after a 0.8% rise in June. However excluding a 1.6% drop in auto sales, retail sales rose 0.4%, compared to an expected drop of 0.1%. Gas station sales fell 1.8% in July, due to lower prices.

Dow Jones Technical Forecast

• Recent decline in the index came as an attempt to reap the profits of its recent rises.
• It is also trying to drain some of its clear buying saturation with the relative strength indicators.
• This is especially with the start of negative signals from them, to gather its positive forces that may help it recover and rise again.
• The index has helped in the resistance level 34,118 to remain intact.

Continued positive support for its trading above its simple moving average for the previous 50 days is being affected by the earlier exit from the range of a bearish corrective price channel that had limited its trading before in the short term, as shown in the attached chart for a (daily) period.

Therefore, our expectations suggest a return to the index’s rise during its upcoming trading, but it must first cross the resistance hurdle 34,118, and then target the resistance level 34,821 immediately.

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Our expectations remain neutral.

Spot natural gas prices (CFDS ON NATURAL GAS) stabilized lower in their recent trading at the intraday levels, recording slight daily losses until the moment of writing this report, by -0.14%. It settled at the price of $8.634 per million British thermal units, after rising slightly during yesterday’s trading by 0.26%. Over the past week, the price advanced by 7.37%.

Spot natural gas prices strengthened in the last full week of May, as energy demand remained strong even as demand in the south-central US declined along with temperatures. With a brief heat wave fueling demand on the East Coast, another blast of cold hits the West Coast – NGI’s Weekly Spot Gas National Avg. 42.0 cents jumped to $8,340.

The National Weather Service said several fronts are expected to affect the Pacific Northwest, the Rockies, and the Northern Plains in the next few days. Thunderstorms and heavy rains accompanied by snowfall are likely in some areas.

With the spring maintenance season winding down in the coming weeks, all eyes will likely be on production growth, after reaching levels close to 97 billion cubic feet per day this winter, production in the low to medium range of 90 billion cubic feet per day since then. Some of that was due to the late-season cold that led to the freezes, while planned pipelines and field maintenance are also cutting off flows. However, production on Friday was reported to be near 97 billion cubic feet again.

Earlier, the Energy Information Administration (EIA) said Thursday that inventories as of May 20 were at just 1,812 billion cubic feet, which is 387 billion cubic feet below last year’s levels and 327 billion cubic feet below the five-year average.

Technically, the decline of natural gas comes as a result of the stability of the pivotal resistance level 8.870, to reap the profits of its recent rises. It also tried to gain positive momentum that might help it breach that resistance, as it tries to drain some of its clear overbought by the relative strength indicators, especially with the start of negative signals from them.

This comes in complete control of the main bullish trend over the medium and short term, along a slope line, with the continuation of positive support for its trades above its simple moving average for the previous 50 days.

Therefore, our expectations remain neutral, awaiting the behavior of natural gas towards the resistance level 8.870, in the event that the price was able to breach that resistance, this is a confirmation of its intention to continue rising, to target immediately after that the first resistance levels at 9.550.

The Dow Jones Industrial Average declined during its recent trading at the intraday levels, to break a series of gains that continued for four consecutive sessions, recording losses in its last sessions by -0.19%. It lost the index about -65.38 points to settle at the end of trading at the level of 35,228.82, after it rose 0.97% in trading on Tuesday.

The performance of the 30 components of the index was equal, as 15 of them rose and the rest closed in the red zone. The share that declined the most by percentage was Home Depot Inc. Shares of -2.91% and Salesforce.com Inc. By -2.87%, while on the other hand, UnitedHealth Group Inc.’s shares topped the list of the highest percentage gainers. by 1.98% and Walmart Inc. By 1.79%.

Shares fell on Wednesday after Russia downplayed peace talks with Ukraine and intensified its attacks on Ukrainian cities. This helped return the price of West Texas Intermediate crude oil more than 2% to return concerns about an increase in already high inflation. This may lead to more aggressive intervention by the Federal Reserve in an attempt to curb this inflation by raising interest rates at its next meeting by half a percentage point instead of the expected quarter point.

On the economic data front, US fourth-quarter GDP growth was revised to 6.9% annualized from 7%. The ADP showed that the private sector added 455,000 jobs in March. Economists polled by Dow Jones Newswires and The Wall Street Journal had forecast an increase in private sector jobs of 450,000.

Technically, the recent index’s decline came as an attempt to reap the profits of its recent rises. It also tried to drain some of its clear overbought by the relative strength indicators, especially with the emergence of a negative crossover in them. It will help it gain positive momentum that might help it to rise again.

This is ahead of the continuation of the positive support due to its continuous trading above its simple moving average for the previous 50 days. This is affected by leaving the range of a bearish corrective price channel that was limiting its previous trading in the short term, as shown in the attached chart for a (daily) period.

Therefore, we expect the index to rise again in its upcoming trading, to target the important and close resistance level 35,631.20, in preparation for attacking it.