US Stock Market: S&P 500, Dow, Nasdaq Updates

US Stock Market: S&P 500, Dow Below Support; Nasdaq Forms H&S Pattern. Stay Informed with Market Analysis.

In recent Wall Street developments, major US stock market indices exhibit vulnerability as they breach key support levels. The S&P 500 and the Dow Jones Industrial Average (DJIA) have tumbled below significant support levels, while the Nasdaq 100 index is at risk of forming a bearish head and shoulders pattern.

US Stock Market S&P 500 – Breaks Below Crucial Support

The S&P 500 has dipped below a critical confluence of support levels, including the June low of 4325, the 89-day moving average, and the lower boundary of the Ichimoku cloud. This break is particularly significant. It marks the end of the higher-top-higher-bottom pattern that had been in place since the start of the year. The breach has paved the way for the 200-day moving average, currently hovering around 4195. If this level is breached, the next support comes into play at the end-April low of 4050.

Analysts point out that this shift in price action reinforces a growing sense of fatigue in higher timeframe charts, a sentiment echoed in recent updates.

Nasdaq 100 – Potential Head & Shoulders Pattern

The Nasdaq 100 index is currently testing a pivotal horizontal trendline that dates back to June, around the 14550-14560 range. A break below this level could trigger a head and shoulders pattern. The left shoulder corresponds to the June high, the head to the July high, and the right shoulder to the early September high. If this pattern is activated, the price objective would be approximately 13200, near the 200-day moving average.

Furthermore, from a broader perspective, momentum on monthly charts has shown signs of weakening compared to the substantial rally witnessed since late 2022. This raises concerns of a gradual decline, reminiscent of the downward trend observed in gold since May.

Dow Jones Industrial Average – Support Breaks

After a bullish breakout in July, the Dow Jones Industrial Average has struggled to maintain its upward momentum. This week, the index dipped below a resistance-turned-support level represented by a horizontal trendline from July, approximately 34300. This breach has opened the door to potential declines, with initial targets set at the May low of 32600. Additional support levels include the 200-week moving average, currently at 31720, and the March low.

Investors and analysts closely monitor these developments in the US stock market as they may indicate broader trends and potential shifts in sentiment.

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