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S&P 500/Dow Jones Technical Highlights:

  • Market turnaround has big gap to fill
  • Dow Jones found 200-day as support

Check out the fundamental and technical forecast for stocks as they rise towards record highs in the Q2 Equity Markets Forecast.

Market turnaround has big gap to fill

Yesterday, the market sprinted higher shortly after the open on a headline announcing that President Trump was going to delay implementing the auto tariff. On that a short-term bottom, at the least, may have been put in place. Upside gap-fills (at least one) are in order at this point, as we have seen several down-gaps post most of the losses off the highs.

First up is the glaring gap from Monday, almost exactly 30 points higher from yesterday’s close at 2881. Pre-market futures are indicating higher by about 10 handles, so that leaves roughly 20 more to go. There is good probability that this one at the least gets filled. It could be as soon as today.

Whether other gaps from earlier this month can yet be filled is to be seen. How the market behaves at the first fill and around the strong Friday reversal-day high of 2891 could be telling as to whether the broken rising wedge still has kick left in down to the 200-day MA or worse, the bottom of the formation at 2722.

At the very least short-term traders look to have an edge here in longs up to complete the Monday gap-fill.

Check out the IG Client Sentiment page to see how retail traders are positioned and what it could potentially mean for various currencies and markets moving forward.

S&P 500 Daily Chart (gap to fill)

S&P 500 and Dow Jones Charts: Gunning for Gap-fills

Dow Jones found 200-day as support

The Dow Jones is bouncing from around the 200-day MA, with its first gap-fill coming up on a move to 25942, but like the S&P 500 it will take an ambitious rally at this time to fill others seen earlier this month. If the market fails to hold onto a rally and the S&P makes a run for the 200-day then it will be interesting to see if the Dow can maintain it’s own 200 and the low from March at 25208.

Dow Jones Daily Chart (Held 200-day, gap to fill)

S&P 500 and Dow Jones Charts: Gunning for Gap-fills

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.

Tools for Forex & CFD Traders

Whether you are a beginning or experienced trader, DailyFX has 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