S&P 500, Dow Jones & Nasdaq 100 Forecast: Outlining Opportunity

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US Technical Indices Features:

  • S&P 500 grinding higher in record territory
  • Nasdaq 100 rising to year + long upper-side channel line
  • Dow Jones at mid-term top-side trend line

S&P 500, Dow Jones & Nasdaq 100 Forecast for the Previous Days

The S&P 500 continues to grind higher after bursting into record territory. The price action is typical that once the market goes to recent highs, it tends to float higher. This behavior should be respected, but let’s not be complacent.

With each small push higher the inevitable retreat approaches. It can be a tiny subtle soak, it could be a sudden and violent one to several day affair. If we see a price drop, the first level to look at is the old high at 4545, it can provide a shelf for the market.

Tactically speaking, for those long ones of lower levels it’s a good idea to at least have some sort of trailing stop strategy in case in the event that we see a dip. For those looking to adhere to the higher trend, it can be hard to resist the urge to pay and get in, but often if you’re patient, you can eventually get into levels that were seen a few weeks earlier or longer.

For example, in June the market exploded to a new record high and lasted higher for about three weeks before finally having a sudden drop, which picked up price to levels of two months ago. There was another break in July that saw the SPX failure a month later to the same break level.

So although it can be painful to watch the market go higher without you, it is often prudent to just wait for a dip before entering; especially true in equity indices. This is where the old September high may come in at some point, similar to what we saw during the spring and summer (see dotted blue lines on the chart below).

It is certainly possible that the level is not holding up, as was not the case in September before a more widespread correction developed, but that is why watching price action on support and resistance tests becomes so important. The July and August events saw sharp reversals of support, while in September momentum was strong as it broke through the old high (see red dotted line in the chart below).

S&P 500 Daily Chart

S&P 500 daily chart

S&P 500 TradingView chart

La Nasdaq 100 runs to the test of the upper-side channel line dating to September 2020. The line is around 16300 at the moment, but is a moving target of course due to its trajectory. The old high at 15701 is regarded as support.

Nasdaq 100 Daily Graph

NDX daily chart

Nasdaq 100-chart from TradingView

La Dow Jones trades at the May to current top-side trend line, a threshold that is not viewed as very significant but could mark the start a small cavity. The old high at 35631 is viewed as the first level of support.

Dow Jones Daily Chart

DJI daily chart

Dow Jones TradingView chart

Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator to track merchant feeling, quarterly business forecasts, analytical and educational webinars held daily, business guides to help you improve business 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



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