Indices Technical Forecast: Neutral to Bearish
- S&P 500 has support below and may hold for now, but likely to break
- Dow Jones is stronger but will suffer a similar fate as broad market
- Nasdaq 100 is very near breaking to a new cycle low
S&P 500 Technical Forecast
The S&P 500 is at risk of breaking the yearly low and selling off even further, but support is support until broken, and so it must be respected as such. The levels to watch on the downside are 4157 and the big Feb 24 low at 4114.
The market is trading soft and we haven’t seen any real fear that suggests bottoming behavior. Until we see a big spike in the VIX, rallies are viewed as transient. Last week’s high at 4308 is short-term resistance. Above there look to 4370. Both spot could offer up opportunities to take advantage of renewed weakness with a threshold to lean on for stops.
S&P 500 Daily Chart
Nasdaq 100 Technical Forecast
The Nasdaq 100 is very near a fresh cycle low. A decline beneath 12936 will do the trick and likely send the tech-heavy index lower, perhaps much lower. If we see a breakdown watch for old support in the area of 12936 up to 13020 to act as fresh resistance on any strength.
If we see strength from around current levels last week’s high at 13541 is first up, followed by the low at 13788. Failure at these levels could provide short entries for those looking at downside trades.
Nasdaq 100 Daily Chart
Dow Jones Technical Forecast
The Dow Jones continues to show relative strength, but if we see the S&P take out the lows then the Dow is likely set to accelerate lower and test or break the Feb lows as well. First up at support is 33108, last week’s low, then 32578 and 32272, the March and February lows, respectively.
On the top-side there is a fair amount of resistance a few handles over 31100, where last week’s high is in almost exact alignment with a swing-low created in April. This could offer up an interesting spot for would-be shorts to enter along the path of least resistance. A break above and hold would put that notion to rest for the time being.
Dow Jones Daily Chart
Resources for Forex Traders
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—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at@PaulRobinsonFX