Dow Jones Industrial Average lost 0.98%, but retains increase since the beginning of the year
Yesterday Dow Jones index showed decline on a back of data from the finance sector, technology and raw materials. The index lost 0.98%, but retains a 0.7% increase since the beginning of the year.
Last month, consumer credit index rose more than expected. The official data showed 17.22B against 14.74B.
It’s also worth to pay attention to yesterday's comments by Janet Yellen. She stated: a low inflation is a temporary phenomenon; Fed notes progress in inflation and doesn’t seek inflation above 2%; financial market conditions have improved; the economy is on the way for further increases in interest rates.
Investors took this as the confirmation that the Fed is prepared to raise rates this year.
Now Dow Jones index dynamics responds to the oil price movement and the strengthening of the yen and gold (as the "safe assets").
Some analysts note the growth of volatility in the past few sessions, after a long period of cooling. Despite the increase in volatility, the market is quite resistant to the negative effects of reducing oil prices and changes in the dollar.
Next, reporting season for the first quarter is important to the market, which begins next week.
How to trade
The level of 17,472.16 provides a strong support for Dow. We believe that with the growth of crude oil, index will show growth. We would buy CALL options if the index rises above the level of 17,632.77. We would buy PUT options if the index goes below the level of 17,472.16.