Stock market under bearish pressure ahead of FOMC meeting

This week, the Fed FOMC meeting became the focus of traders as the stock market made a bearish turn. The bearish pressure resulted from the higher-than-expected inflation numbers and job data last week. It drives concern that the Fed might not cut interest-rate this year and stick with the “Higher for longer” interest-rate policy. If inflation numbers continue soaring up then traders will expect more bearish downturn in the stock market at least until the start of second-half of this year.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index attempting to bounce from the 37,750 – 38,000 area but comes under bearish pressure. The index will continue to test the area and traders will monitor the reactions. If a bearish breakout happens then the index will target the blue line or level around 37,000. A close below the level will confirm the continuation of a bearish trend and the index might be bearish or sideways for some time.

International Business Machine (IBM)

IBM gapped down after the release of earnings results. The share prices almost reached the daily SMA 200 where bullish reactions might happen. If the share prices could make a strong bullish reaction from the daily SMA 200 then we might see the start of a new bullish leg. A breakout and close below the daily SMA 200 might confirm the start of a bearish trend.