Indices Technical Forecast: Neutral

  • The market continues its counter-trend rally, but could stall at any time
  • There are levels above in the S&P that will be important to pay attention to
  • SPX, NDX, and Dow levels to watch in the days ahead

S&P 500 Technical Forecast

The S&P 500 continues to find itself in rally mode, but this up-move remains viewed as a countertrend rally in an extended bear market that began at the start of the year. With that bias in mind I am paying close attention to how the market responds to resistance levels just ahead.

The high created at the end of May around 4202 is the first important level to watch. It may not induce the final high of this countertrend rally, but it could spark a tradeable reaction. If the market can climb above resistance then watch the declining 200-day moving average and the trend-line off the record highs. Confluent resistance would make for a very interesting spot to see the market turn down from, and is viewed as about as high as the market is likely to go in this countertrend sequence.

In the near-term, the trend is still higher, so continuing to give the upward trajectory respect, but soon things may start to turn as we head towards the fall.

S&P 500 Daily Chart

sp500 chart

S&P 500 Chart by TradingView

Nasdaq 100 Technical Forecast

TheNasdaq 100 is at a channel line off the December peak, this could keep a lid on the market for the moment. If the line turns out to be more than just a short-term problem, then the S&P 500 will have a hard time reaching the aforementioned levels.

On weakness, watch the area around 12950 – it was a strong level of support and resistance this year. It could help keep any weakness off the trend-line contained in the near-term. A turn off the trend resistance and breaking of that level, though, will likely signal a larger round of selling.

Nasdaq 100 Daily Chart

ndx chart

Nasdaq 100 Chart by TradingView

Dow Jones Technical Forecast

The Dow Jones is neither here nor there with respect to levels. Ahead, however, does lie some big resistance similar to the S&P 500. The May high at 33434 could come into confluence with the trend-line and 200-day MA at some point.

On the down-side, we will need to see price decline to around 31867 to find any meaningful support. In general, the outlook for the Dow is less certain with respect to levels, but will of course go along with what the broader market is doing. The preference is to pay closer attention to what the S&P and NDX are doing.

Dow Jones Daily Chart

dow jones daily chart

Dow Jones Chart by TradingView

Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

—Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at@PaulRobinsonFX





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