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S&P 500/Dow Jones/Nasdaq 100 Technical Highlights:

  • S&P 500 backing into prior resistance, now support
  • Dow Jones remains the laggard, below resistance
  • Nasdaq 100 is unrelenting, but can it continue to lead?

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S&P 500 backing into prior resistance, now support

The 2800/17 region was a big area of resistance for the S&P 500 not long ago, the zone started building its relevance back in October. Early this week the market snuck above it and now we’re already in a retest of this important area. It would have been more ideal for the sake of clearance to have traded higher before the retest, but nevertheless the zone was breached.

Helping give this zone some reinforcement is a trend-line off the December low. It’s not the sturdiest of trend-lines given the distance between the two inflection points and the fact it only has the bare minimum number to even create a trend-line, but it’s still a source of support.

How the market behaves here will be important. Can it hang on and use the confluent levels/lines as support, or will we see a sinking back below and changing of the chart-scape? For now, abiding by the rule of old resistance becomes support, along with the rule of thumb that support is to be trusted until broken.

A solid hold here and shove higher will bring into light the possibility of a test or better of the record high. A breakdown and we’ll have to evaluate the severity of the break and whether a larger decline may be in the works.

Stocks are rallying, but will it last in the long-term? Find out where our analysts see stocks headed in the Global Equities Forecast.

S&P 500 Daily Chart (Old resistance, new support)

S&P 500 daily chart, old resistance, new support

Dow Jones remains the laggard, below resistance

The Dow unsurprisingly pulled off with a little more vigor than the S&P and the Nasdaq 100, which actually rose. It’s been a severe laggard for a few weeks now and not helping is price and trend-line resistance aligning over the 26k-mark. If the broader market is to weaken (i.e. S&P fall below 2800) then the Dow remains the go-to short for as long as it continues to demonstrate relative weakness and abides by resistance.

Dow Daily Chart (relative weakness, resistance)

Dow daily chart, relative weakness, resistance

Nasdaq 100 is unrelenting, but can it continue to lead?

The Nasdaq 100 continues to forge on which is a good sign for the market, but it is becoming extended. It’s also becoming extended into what could amount to a significant test of a long-term trend-line, starting back in June 2016. Nevertheless, as long as the NDX continues to generally lead the way then it is a target for longs on dips/consolidations.

Nasdaq 100 Daily Chart (can it continue to lead?)

Nasdaq 100 daily chart, can it continue to lead?

To learn more about U.S. indices, check out “The Difference between Dow, Nasdaq, and S&P 500: Major Facts & Opportunities.” You can join me every Wednesday at 10 GMT for live analysis on equity indices and commodities, and for the remaining roster of live events, check out the webinar calendar.

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---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX