Dow Jones Industrial Average and S&P 500 drop beneath crucial support; The Nasdaq 100 forms potential ‘Head and Shoulders’ configuration

Dow Jones Technical Pattern

DJIA in a cracking support zone

The benchmark Dow Jones Industrial Average struggled to maintain momentum following a positive breakout in July. Recently, the DoW fell under a July upper barrier – convert -support lateral trend line (around 34300 level). The breach paved the road to the May bottom of 32600, along with the 200-week MA – (currently at 31720 mark). Which coincides with a March trough.

The Federal Reserve held the federal funds rate constant at 5.25%-5.5% percent in accordance with forecasts. While boosting its economic outlook to ‘robust’ from ‘modest’ while remaining the option clear for a further rate rise.  Since ‘inflation remained high’. The overview of Economic predictions projected 50 bps less rate reduction in 2024 compared to the June predictions. The panel now anticipates just a two rate reduction in 2024, with its funding rate hovering at 5.1 percent.

Strong real rates and good prices in stocks will probably to limit any major advance right here. Furthermore, in accordance to some assessments, the Fed’s policy is currently tight for the very first period after the 2008 financial turmoil.

The S&P 500 has slipped under critical support.

The S&P 500 and Dow (DJIA) have both broke through crucial support levels, Whereas the Nasdaq appears susceptible within a possible negative pattern.

On the daily graphs, the S&P 500 has dropped under a critical convergent assistance.  Comprising the June bottom of 4325 mark. Its 89-day MA with the bottom border of the Ichimoku cloud . The split is significant because the elevated-peak-more-higher-lows pattern.  That has remained in place from the start of the year now been disrupted. The breach initially paved the road towards the 200-day MA which is presently at 4195 level.  The subsequent level of support is around the end-of-April bottom of 4050 marker

The Nasdaq 100 is in a potential head and shoulders danger.

The Nasdaq 100 index is closing in on a significant lateral trend line from June (about 14550 to 14560). A head and shoulders structure would come from any discrepancy underneath. At the June top, with the shoulder on the left. The peak of the head in the month of July. With the other shoulder towards the peak of September. If the negative sign is engaged, the final price target will be approaching 13200. Adjacent to the 200-day  MA

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Nasdaq 100 Daily Pivots