Since the beginning of 2018, the US index lost almost 1.9%, even so, last week dropped more than 1.0% and is in a distribution phase since late June.
Last week the Index initially fell but found enough buying pressure near the 38.2 Fibonacci retracement to trim some of its losses, but still closed red although in the middle of the weekly range, but managed to close below the previous week low, which suggests a bearish momentum.
The stochastic is showing a strong bearish momentum however is still above the 50 midline.
The US Index is testing again the bullish trend line but did not close below it, which signals that are still some bulls ready to step in. However, the Dow Jones Industrial Average is now trading near a critical support around 23,980 where it resides the confluence of the bullish trend line with 50-week moving average and the 38.2 Fibonacci retracement.
Expecting an upward move to the 23.6 Fibonacci retracement at 25,013 on a bounce from the 38.2 Fibonacci retracement at 23,980 (scenario 1). Although, a break below the 38.2 Fibonacci retracement at 23,980 may start a bearish run down to the 50 Fibonacci retracement at 23,145 (scenario 2).