Dow Jones set for a strong open after sell off, begins to...

Dow Jones set for a strong open after sell off, begins to build a base

According to Spread Betting firm IG Markets, The Dow Jones is set to open up over 400 points.

The Dow sold off heavily in the final hour of trading yesterday but futures held at the previous days low, a key technical factor for investors who are looking for the market to build a base before a rally.

Even though Chinese stocks finished in the red, they were down (a mere) 1% after days of selling of around 8%.

These two factors along with cheap valuations maybe the primer for a relief rally in global equities.

“The failure of Chinese authorities to provide any indication of support for the markets over the weekend saw panic selling ensue on Monday, Tuesday we witnessed the dead cat bounce die in the US, however we are now starting to see a degree of rationality return with investors looking to buy value as the market looks to establish a bottom” said Mr Davies of Charles Hanover Investments.

 

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