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S&P 500, Dow Jones & Nasdaq 100 Technical Forecast

S&P 500, Dow Jones & Nasdaq 100 Technical Forecast

Paul Robinson, Strategist

U.S. Indices Technical Highlights:

  • S&P dipped to support, important test here
  • Nasdaq 100 continues to retrace towards trend support
  • Dow Jones look the weakest of the big three indices

S&P 500, Dow Jones & Nasdaq 100 Technical Forecast

The S&P 500 has been pulling back gradually and thus far smacks of a corrective decline within the context of a strong uptrend. Yesterday, the SPX hit channel support and has started to already bounce off it. It will be important for it to hold if the clean sequence the past few months is to remain.

A daily close below 4435 would be reason for concern that we are seeing a larger correction take place, or worse. This would have price outside the channel formation and looking lower. But in the event we don’t see a breach, the focus remains on this being a healthy dip.

Looking higher, the next objective would be to get back to the record high set at 4545 during the first couple of days of the month. Beyond there the top of the channel would once again be viewed as a potential obstacle for the market to cross.

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S&P 500 Daily Chart

S&P 500 daily chart

S&P 500 Chart by TradingView

The Nasdaq 100 continues to act generally bullish, with its decline also occurring in a gradual manner. It hasn’t quite hit trend support, but just at its feet lies a trend-line from May that is seen as giving the tech-heavy index something to lean on.

Generally speaking, the growth index continues to be a leader when compared to the more cyclical weighted Dow Jones. We may see a rotation in the other direction soon, as this has become a theme in focus this year, but until we do expect the NDX to lead on the top-side.

Nasdaq 100 Daily Chart

Nasdaq 100 daily chart

Nasdaq 100 Chart by TradingView

The Dow Jones is the weakest of ‘big three’ US indices, and may this may continue to be the case for the foreseeable future. It is in a somewhat precarious position with it having posted a lower low from the August low.

But it is hard to read too much into this when the general trend for stocks is higher and sentiment remains supportive. However, if market conditions begin to deteriorate the Dow is currently positioned to lead on the downside. Short-minded traders may want to focus on this index versus the Nasdaq or S&P 500.

Dow Jones Daily Chart

Dow Jones daily chart

Dow Jones Chart by TradingView

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---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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