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Market Correction: Predicting S&P 500 (SPX), Nasdaq Composite (IXIC), and DJIA (US30) Trends

The S&P 500 (SPX) has exited its previous upward trend channel by breaking below critical support levels. Currently, it has found temporary footing at the 50-day EMA, positioned at 5,092.5.

S&P500

S&P 500 (SPX): Continued Correction Anticipated

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The S&P 500 (SPX) has exited its previous upward trend channel by breaking below critical support levels. Currently, it has found temporary footing at the 50-day EMA, positioned at 5,092.5. The MACD corroborates a bearish outlook, with the lines crossing downward and the histogram indicating a decrease over the past two days. Despite ambiguous signals from the RSI, the SPX appears poised to breach the 50-day EMA support downwardly. If this break occurs, we could see a descent to the next substantial Fibonacci level at 4,820, suggesting a further decline of approximately 5%.

S&P500

Since reaching a peak three weeks ago, the SPX has corrected by about 4%. Should a bounce occur, resistance might be encountered at Fibonacci levels 5,133 and 5,190. Nevertheless, current indicators from both daily and weekly MACD suggest the continuation of the correction.

Nasdaq Composite Index (IXIC): Potential Support Break Looming?

NASDAQ

Similarly, the Nasdaq Composite (IXIC) has violated its upward channel’s support, retreating to its 50-day EMA. There is a looming possibility of breaking below this level, targeting the 0.382 Fibonacci support at 15,012.5, indicating a potential downside of roughly 5%. The bearish trend is confirmed by the MACD, with a negative crossover and declining histogram. The RSI, however, remains neutral with no definitive direction.

 

NASDAQ

Since its recent high four weeks ago, IXIC has seen a correction of 4.1%, and the bearish sentiment is further supported by bearish crossovers in the weekly MACD.

DJIA (US30): Indications of Further Decline

DJIA

The Dow Jones Industrial Average (US30) has experienced a sharp 6% pullback over the last 16 days, hinting at potential further declines toward the 0.382 Fibonacci level at 36,991. Additional support might be found near the 50-week EMA at 36,367. The MACD signals bearishness through its negative crossover and declining histogram, suggesting a continuation of the downward trend.

DJIA

If the US30 finds support at the 0.382 Fibonacci level, it could potentially reverse towards Fibonacci resistances at 38,122 and 38,900. Despite bearish signals on the daily chart, the RSI is nearing oversold conditions, which may presage a possible upward correction. The golden crossover among the EMAs supports a bullish mid-term outlook, indicating potential for future gains after the current pullback stabilizes.

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Konstantin Kaiser
Financial Writer and Market Analyst
Konstantin Kaiser comes from a data science background and has significant experience in quantitative trading. His interest in technology took a notable turn in 2013 when he discovered Bitcoin and was instantly intrigued by the potential of this disruptive technology.
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