Indices Technical Forecast: Neutral
- Volatile week leaves markets in limbo, coming week could be big
- S&P 500, Nasdaq 100, Dow Technical levels to watch in the week ahead
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S&P 500, Nasdaq 100, Dow Jones Forecast for the Week Ahead
The S&P 500 was quiet ahead of CPI, but on the worse than expected print the market tanked and rallied sharply. The reversal following a strong down move lower brings into play the possibility that a rally could develop from here.
Friday’s weakness weakened that notion a little, but volatility is to be expected in this environment. The 3600 level could come into play as an important one. A break below last week’s low at 3491 will put a bullish outlook on its heels, but only if it can be sustained. A small breach and reversal again may actually strengthen the upside – price action pending.
It’s a volatile market so it’s day-to-day often times in assessing it. The clean downward trend since mid-August offered good clarity, but given we are extended and seeing a sharp uptick in two-way trade, it gets more difficult to have strong conviction either way.
On the upside, we could see the trend-line from the summer high tested, but will first need to break above 3712. It is unclear at this juncture how a rally could unfold, but generally speaking only looking to play lightly from the long side as it does appear we have more in store on the downside as the bear market looks to have much further to go. Until we see a true panic move lower this is seen as the case. Clearing rallies from fresh lows will happen, but those will not likely last more than a few weeks at a clip.
S&P 500 Daily Chart
S&P 500 Chart by TradingView
Nasdaq 100 Technical Forecast
The Nasdaq 100 is still behind and will need to catch up soon and play leader if we are to see a rally develop and even grow legs. There is a solid channel from the summer high in play, will continue to use that as a guide.
Nasdaq 100 Daily Chart
Nasdaq 100 Chart by TradingView
Dow Jones Technical Forecast
The Dow Jones has been stronger than the other indices since it held above its September low. Watch the area around 29650 in the near-term. The low at 28660 needs to hold or at least not be breached for very long in order to keep the upside alive.
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Dow Jones Daily Chart
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—Written by Paul Robinson, Market Analyst
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