— Frank Cappelleri (@FrankCappelleri) August 26, 2022
Today’s Chart of the Day was shared by Frank Cappelleri (@FrankCappelleri). It’s a daily bar chart of the Nasdaq 100 over the past six months. The Nasdaq ended the week on a sour note today, dropping 4.10%, marking the worst day since June 13th. Frank points out that Thursday’s big gain, followed by today’s big drop formed the right shoulder of a bearish head & shoulders pattern. We broke the neckline of that pattern today, which is especially concerning given that the neckline coincides with the June highs. The bulls really needed to hold above those June highs, but they couldn’t. Was all of August just one big failed breakout of the June highs? If so, we could see a sharp move lower in the near term.