Skip to Content
News & Analysis at your fingertips.

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. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
Dow Jones, S&P 500, Nasdaq 100 Forecast: Pullback Testing Resolve

Dow Jones, S&P 500, Nasdaq 100 Forecast: Pullback Testing Resolve

What's on this page

U.S. Indices Technical Highlights:

  • S&P 500 surges off support, new record high near
  • Dow Jones finds significant support around the 200-day
  • Nasdaq 100 top of channel test nearing again
Equities Forecast
Equities Forecast
Recommended by Paul Robinson
Check out the Q1 EQUITIES Forecast
Get My Guide

Dow Jones, S&P 500, Nasdaq 100 Forecast: Pullback Testing Resolve

The S&P 500 is showing us why chasing stocks to new record highs can be painful. The breakout is already failing, but not unexpected even if the trend ultimately remains firmly higher. The long-term pattern for stocks is to break out to new highs and then within days to weeks retrace a large portion, if not all, of the gains made in fresh record territory. This is why on this end a buy-the-dip approach is preferred.

With that said, we are now below the prior record high and on the way towards what could become a very important trend test. The October trend-line lies below, and has been validated twice during the month of December.

Hold this line again and the broader trend remains firmly intact and new highs could come in fairly short order. On the flip-side, if this line breaks, then look for a broader correction or worse to set in. For now, in the very short-term there does appear to be some room to the downside to at least the October trend-line.

Advertisement

S&P 500 Daily Chart

Please add a description for the image.

S&P 500 Chart by TradingView

The Dow Jones is also back below its prior record high set in November at 35565. The index is set up to decline some more, but support isn’t as clear as it is with the S&P. The most recent low came off the 200-day moving average, but to reach that point again will require a fairly sharp decline. If the SPX can hit and hold the October trend-line while the DJI demonstrates relative strength, it could set it up as a preferred long candidate later on.

Dow Jones Daily Chart

Please add a description for the image.

Dow Jones Chart by TradingView

The Nasdaq 100 is quickly rolling over towards the lower end of a bull market channel dating back to the back half of 2020. A test of the channel is considering a major development as it has helped keep the NDX pointed higher for quite some time. A hold and turn off the lower side will keep longs well intact, while a break may indicate a major shift in trend coming.

Nasdaq 100 Daily Chart

Please add a description for the image.

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.

DISCLOSURES