U.S. Indices Technical Outlook:
- S&P 500 still has room to rally before big resistance comes into play
- Nasdaq 100 is trading around meaningful resistance at this time
S&P 500 and Nasdaq 100 Technical Outlook for the Days Ahead
The S&P 500 continues to take back losses experienced during the first half of the year, but at some point with the rally viewed as only a recovery it is anticipated that we will see a major turn lower develop.
The timing of a recovery bounce through summer towards fall is lining up nicely for an old-school macro-style downturn into the worst period of the year for stocks. From where stocks will start to turn down from, though, is the big question.
The S&P still has a little room to run before a peak may be seen. The 4200 level is seen as potentially quite meaningful. If a noteworthy top doesn’t develop there, then a run towards the declining 200-day and trend-line off the record highs may be in order. That would get us to the low 4300s. This is seen as the best case scenario for stocks.
We are seeing a little weakness to start the week, but barring it morphing into major selling it is only viewed as interim weakness before another push higher develops. There is a steep trend-line rising up from the middle of July that may turn momentum back higher. Hard to say, though, without further trading to determine where stocks may turn back higher from. A shallow pullback/consolidation could firm up the outlook for a continuation trade towards 4202.
S&P 500 Daily Chart
S&P 500 Chart by TradingView
The Nasdaq 100 is at a very interesting juncture right now, with big resistance standing in its way around 12950. We are seeing price stall and while it could put a dent in the rally, higher levels could be around the bend with the S&P still looking like it has upside room.
I’ll be watching to see how the market reacts off resistance. If we see a sharp downturn soon then perhaps the tides in the market are starting to turn already. If resistance can be overcome then watch the channel line off the December peak, currently around the 13275 mark.
Nasdaq 100 Daily Chart
Nasdaq 100 Chart by TradingView
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—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX