Bear Market Lows Coming into Focus

Technical Outlook of US Indices:

• S&P 500 is headed for the early summer rally
• Nasdaq 100 continues to be the focus as the leader
• Dow Jones levels and lines to watch in the coming days

S&P 500, Dow Jones, Nasdaq 100 Outlook: Bear Market Lower Focuses

The market is on its back foot, and it is breaking to the worst levels seen since the early days of the summer rally. Looking at the S&P 500, the next level of significant support clocks in around the low 3700s. There is a May level around 3811, but not seen as significant as the levels immediately below it.

And of course even more significant is the June low of 3636. We don’t think we’ll see that in this run lower without a bounce first, but it’s expected to be met and surpassed in the coming weeks.

The thinking is that the market will sell off into at least the next month before finding a significant low. A spike in fear/capitulation looks necessary for the market to find a tradable low.

S&P 500 Daily Chart

S&P 500 chart from TradingView

The Nasdaq 100 looks at the 11492/321 area as the next point of support, with the summer low at 11037 as the biggest level to watch. The low at 11927, if fully exceeded soon, will become a point of potential resistance on any bounce higher.

Nasdaq 100 Daily Chart

Nasdaq 100 chart from TradingView

TheDow Joneshas support down around 30149, followed by the June low at 29653. The 31048 level will be seen as a significant place to watch as resistance against any rebound. The thinking is obviously the same as the above indicators, new bear markets are going down this fall.

Dow Jones Daily Chart

Dow Jones chart from TradingView

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—Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at@PaulRobinsonFX