We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Wall Street
More View more
Real Time News
  • BOC's Gravelle says inflation targeting is not impeded by size of balance sheet $USDCAD
  • Bitcoin declined to a four-week low at $7,598 then reversed higher and closed later the weekly candlestick in the green with a 2.5% gain. Get your $BTC technical analysis from @malkudsi here: https://t.co/JLTBNlX1Wp https://t.co/r60ZMMsDjC
  • BOC's Gravelle says thoughts on 0.25% lower bound have not shifted - BBG
  • Macro Matters: USD Down the Drain as Euro, CAD, Aussie Rip Higher https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2020/06/04/Macro-Matters-JS-USD-Euro-CAD-AUD-Rip-Higher.html https://t.co/8BZVeo4opZ
  • USD/JPY is approaching medium-term uptrend resistance and while the outlook remains constructive, the advance may be vulnerable near-term while below confluence resistance. Get your $USDJPY technical analysis from @MBForex here: https://t.co/93D7AyhHtG https://t.co/Lc1unSJzCg
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Gold: 1.24% Silver: 1.04% Oil - US Crude: -0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/swXDNEcNpc
  • U.S. Trade Representative Lighthizer says COVID-19 to affect trade ties with China and India - BBG
  • U.S. Trade Representative Lighthizer says he feels very good about Phase-1 of the US- China trade agreement - BBG
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.31%, while traders in US 500 are at opposite extremes with 77.32%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/vefZ8bsE8C
S&P 500 & Dow Jones Technical Outlook: Big Top & Drop in the Cards

S&P 500 & Dow Jones Technical Outlook: Big Top & Drop in the Cards

2018-04-06 10:08:00
Paul Robinson, Strategist

S&P 500/Dow Jones Highlights:

  • S&P 500 lower-high could soon be in the works
  • Dow Jones building a clean descending wedge
  • Levels and lines on the chart to watch

See what factors are expected to drive the S&P 500 this quarter, along with the Top Trading Opportunities for 2018 on the Trading Guides page.

S&P 500 lower-high could soon be in the works

The bounce in progress, so far, is just that – a bounce. The confluence of support between the 200-day MA (an important and popular threshold in stocks) and the February 2016 trend-line have thus far kept the S&P 500 from falling apart. It looked as though a break was going to happen early in the week, but instead the market was able to hold onto support for now.

A rally isn’t expected to carry the market much further, perhaps as high as the trend-line off the record high, which is a decent-sized move from here, however; looking at the chart of the Dow that may be overly optimistic. More on that in a moment.

If the S&P soon carves out a lower-high and turns down, breaking the recent low, another large leg lower looks to be in store. On an initial thrust, this could take the market down to the lower parallel connected to the trend-line off the record high, somewhere in the vicinity of 2400. The 2009 to current bull-market trend-line, down near 2200, is seen as coming into play at some point.

Struggling with the rise in volatility? We’ve got a guide designed to help you – Building Confidence in Trading.

S&P 500 Daily Chart (Lower-high anticipated)

S&P 500 daily chart with confluence of important supprt, lower high anticipated, then decline

Dow Jones building a clean descending wedge

The Dow Jones Industrial Average (DJIA) is in the process of carving out a descending wedge, which is why the S&P may not make it much further before posting another lower-high. The pattern is becoming pretty clear with this second bounce nearing completion around the trend-line off the record high coupled with the flat bottom which arrives in the vicinity of the 200-day MA.

A turn down and break of the underside of the pattern will have it in full-swing. Its implications are for a drop of nearly 3000 points from the validation point, or a move to around the 20k mark. This target is determined by the height of the pattern subtracted from the bottom of the wedge. It won’t necessarily happen in one big fell swoop like the one off the record high, but it is likely to happen quite swiftly.

DJIA Daily Chart (Descending wedge forming)

DJIA daily chart with descending wedge top forming

If you’d like to listen in on live analysis pertaining to global equity indices (and commodities), join me every Tuesday at 10 GMT time for technical insights.

Resources for Forex & CFD 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

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.


News & Analysis at your fingertips.