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S&P 500, Dow Jones & Nasdaq 100 Forecast: Renewed Strength Ahead

S&P 500, Dow Jones & Nasdaq 100 Forecast: Renewed Strength Ahead

Paul Robinson, Strategist

U.S. Indices Technical Highlights:

  • S&P 500 on the verge of breaking small consolidation pattern
  • Dow Jones looking for a new record high
  • Nasdaq 100 consolidating on trend support

S&P 500, Dow Jones & Nasdaq 100 Forecast: Renewed Strength Ahead

The S&P 500 is poised to break into new record territory from a sturdy base that has been created on a prior record peak made during the middle of last month. The congestion pattern is moving towards two weeks in age and should be ready to lead the market higher soon.

When looking at other times the market broke out the new highs it often fizzled after a short while back below the breakout point, even if only temporarily. This has made pullback trading often the best approach for equities, but given the orderly sideways movement we have seen the consolidation pattern should at least offer up a short-term breakout opportunity.

On a breakout above 4429 longs will want to keep an eye on price action for signs of stalling. It is difficult to say how far the market could rise before this occurs. As for shorts, there is no appeal at this time.

S&P 500 Daily Chart

spx daily chart

S&P 500 Chart by TradingView

The Dow Jones continues to move sideways both in the near-term and going back a few months. The sideways price action bodes well for higher levels in the near-term and potentially on an intermediate-term basis as well. Money will likely need to rotate out of growth into value plays for an extended move to grow legs, but certainly a possibility as the growth/value trade continues to be a key theme.

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Dow Jones Daily Chart

dji daily chart

Dow Jones Chart by TradingView

The Nasdaq 100 tagged trend support yesterday and looks poised to make another run. A breakout above 15142 will have a top-side parallel in focus in the vicinity of 15450. A breakdown below the trend-line 14787 would be reason to turn cautious.

Nasdaq 100 Daily Chart

ndx daily chart

Nasdaq 100 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

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

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