Wall Street quickly reverted a strong opening, and closed deep in the red, with the DJIA losing 120 points and ending the day at 17,419.75, a fresh 6-month low.
The decline was led by weak earnings report from media companies, rising concerns over the future of the industry, as more viewers seem to be dropping cable TV in benefit of internet services.
The index fell as low as 17,368 intraday, and the daily chart shows that it briefly extended below the July low before bouncing some. Nevertheless, the bearish bias is still strong, with the 20 SMA turning lower well above the current level, and the technical indicators holding near oversold levels, with the RSI still heading lower around 36.
In the 4 hours chart, the 20 SMA heads sharply lower also above the current level, whilst the technical indicators are posting limited bounces in negative territory, suggesting renewed selling pressure below the mentioned low should fuel the sell-off down towards the 17,200 region.
Meanwhile the FTSE 100 ended pretty much unchanged at 6,757.09, down 5 points after erasing its early losses following the BOE’s decision to remain on hold. As in most European markets, trading was limited within familiar ranges, as investors are getting ready for the US employment report on Friday, which will be key to determinate whether the FED will be able to raise rates in September, or not.
Technically, the daily chart shows that the index was again contained by its 200 DMA, but with the 20 SMA heading higher below the current level. In the same chart, however, the technical indicators continue hovering around their mid-lines, giving not much clues on what’s next in the mid-term.
In the 4 hours chart the 20 SMA maintains its bullish slope below the current level, but the Momentum indicator remains flat around 100 whilst the RSI indicator retreated from overbought territory, but is far from suggesting additional declines.