#INDICES ANALYSIS: #DowJones,#SP500,#FTSE100,#DAX (4 May 2022)

 Dow Jones Wave Analysis

• Dow Jones reversed from support level 32460.00
• Likely to rise to resistance level 35000.00

Dow Jones recently reversed up from the key support level 32460.00 (which has been reversing the index from the start of this year), standing near the lower weekly Bollinger Band.

The support area near the support level 32460.00 was further strengthened by the 38.2% Fibonacci correction of the weekly upward impulse from 2020.

Given the clear weekly uptrend – Dow Jones can be expected to rise further toward the next resistance level 35000.00.

S&P 500 Forecast: Index Trying to Save Itself

I would be very cautious between now and closing on Wednesday.

The S&P 500 rallied a bit on Tuesday to continue the upward pressure from the Monday low. As we have bounced this way, it does suggest that it is probably only a matter of time before we go higher, but it is very likely that the market will continue to focus on the Federal Reserve, and not anything else. After all, the Federal Reserve is the only thing that the stock market cares about right now, and with the FOMC meeting ending on Wednesday, it is very likely that we will continue to see a lot of volatility afterward.

I believe at the end of the day on Wednesday we should have a lot more clarity as to where the markets are about to go, so pay close attention to where we close. The size of the candlestick shows that there is less than strong enthusiasm, so I think it is probably more likely than not that we will continue to see a lot of back and forth between now and the Fed statement/press conference.

On the upside, I see the 4300 level as a major barrier that will be difficult to overcome. It is not until we break above the level on a daily close that I think we can get truly bullish. In the short term, is very likely that we go back and forth, but again, if we were to break down below the hammer from the Monday session, then it is likely that we could go down to the 4000 handle, perhaps even lower than that. I would be very cautious between now and closing on Wednesday.

FTSE 100 Forecast: Flashing Signs of Strength

The only thing you can count on is volatility, and that is going to be true with all stock markets, so be cautious about your position sizing.

The FTSE 100 gapped lower to kick off Tuesday but found enough strength near the 50-day EMA to turn around and close at the very highs of the day. This has been a very strong move, but at this point, it is obvious that we do not have an uptrend to deal with, as we recently had pulled back quite significantly from the 7600 level. That being said, we still have a lot of noise just above that will come into the picture, so I think it is going to be difficult to break above there.

Sometimes, when a pattern like this fails, that ends up being a much bigger signal. Ultimately, if we can break above there, then it is likely that we will enter more of a “buy-and-hold” type of situation. On the other hand, if we were to break down below the 7300 level underneath, and by extension the 200-day EMA, the market is likely to fall apart and perhaps reach down to the 7000 handle. The 7000 handle has a certain amount of psychology attached to it, and I think a lot of people will be paying close attention to it.

The only thing you can count on is volatility, and that is going to be true with all stock markets, so be cautious about your position sizing. However, we do have a couple of levels mentioned previously that we could pay close attention to, so wait for your signal to appear.

DAX Forecast: Index Chopping Back and Forth

We have been in a downtrend for a while, and I think we will probably have to continue fading short-term rallies.

The German DAX Index rallied a bit in the futures markets on Tuesday to reach above the €14,000 level. However, we have seen a lot of back and forth over the last couple of weeks, and I think it will continue to be the case. The €14,250 level above is significant resistance, especially now that the 50-day EMA is racing towards it as well. Ultimately, I do think that short-term rallies will more than likely be sold into at the first signs of exhaustion.

On the other side of this argument would be that we will break down below the €13,000 level, which would more likely than not be accompanied by selling in other major indices. Because of this, you need to be very cautious about what is going on, but I do think that it is probably only a matter of time before we have to make a bigger decision. With that in mind, it is likely that we will see a lot of volatility in the DAX, so keep an eye on these levels and of course other indices such as the Nikkei, S&P 500, FTSE 100, etc.

I think the next couple of days will more than likely be choppy and indecisive, so keep in mind that you need to be very cautious as the most likely of things will be a short-term rally that we can start shorting at the first signs of exhaustion. We have been in a downtrend for a while, and I think we will probably have to continue fading short-term rallies. However, I would be rather quick to take profits as the occasional bounce will more likely than not be part of this market. You can almost draw a bit of a negative channel over the last several weeks.

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