Indices Technical Forecast:
- S&P 500 trying to stabilize and reassert its upward trend
- Dow Jones maintaining, but has potentially bearish price sequence
- Nasdaq 100 in a precarious spot, could be a bad omen for the broader market
S&P 500 Technical Forecast
The S&P 500 has been coming off the recent highs, but in a fairly controlled fashion as momentum has been relatively muted. Perhaps the pullback is over or very nearly so, but with the NDX looking the way it does (see below), the pullback could turn into an outright decline.
Looking lower, the first meaningful level of support clocks in by way of a pair of slopes running higher from September and November. This puts support around the 3815 mark. Looking at the top-side, the prior record high is the first and only visible level of resistance at 3893.
S&P 500 Daily Chart (slope support below)
Dow Jones Technical Forecast
The Dow Jones has been the strongest of the major averages, but does have potential to validate a broader topping sequence in the form of a rising wedge. For now, the lower side of the wedge (also in confluence with the March trend-line) is viewed as trend support, but if broken then look for a larger, possibly much larger decline to unfold. Resistance currently clocks in at the old high of 33227.
Dow Jones Daily Chart (trend up, but watch for wedge break)
Nasdaq 100 Technical Forecast
The Nasdaq 100 at the moment is in a precarious position as a significant lower-high may have already been carved out at 13297. Right now the NDX has retraced about half of the rise off the monthly low, and if it can’t get into gear here soon, more momentum could kick in with risk shifting towards a visit of the 200-day MA.
If, however, the market can stave off a decline from here, then a close above 13300 will put the NDX in the driver’s seat back towards the prior record high at 13879. The next few days could prove pivotal for the not only the tech/growth heavy index, but the market as a whole.
Nasdaq 100 Daily Chart (lower high scenario possibly in play)
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—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at@PaulRobinsonFX