#INDICES Forecast: #NASDAQ,#DOWJONES & #SP500 (14 NOVEMBER 2022)

Dow Jones Technical Analysis: The Index Saves Itself From Early Losses

Investors now see an 81% chance of a 50 basis point rate hike in December and a 19% chance of a 75 basis point increase.

• The Dow Jones Industrial Average rose slightly during its recent trading at the intraday levels, to achieve slight gains in its last sessions, by 0.10%.
• It went by about 32.49 points, settling at the end of trading, away from the lowest levels of the session at 33,747.87.
• This happened after rising by 3.70%during Thursday’s trading. Over the past week, the index recorded an increase of 4.15%, or the equivalent of 1,344.64.

Dow Jones Technical Analysis

Technically, the index is benefiting from the continuous positive support of its trades above its simple moving average for the previous 50 days. It was also affected by its breach of a bearish corrective slope in the weekend’s trading, to give a great opportunity to end this bearish corrective wave in the short term, but in front of that, we notice the influx of negative signals on the relative strength indicators. This is what has curbed the index's recent gains.

Therefore, our expectations indicate more ascent for the index during its upcoming trading, as long as support remains at 32,504.00, to target the first resistance levels at 34,281.30.

NASDAQ 100 Forecast: Breaks Out from Short-Term Resistance

The market will more likely than not continue to find reasons to go higher in the short-term, but longer term we are still very much in a downtrend.

• The NASDAQ 100 has rallied a bit during the trading session to break above the 11,800 level, showing signs of life.
• At this point, the market looks as if it is ready to go higher, perhaps reaching towards the 12,000 level, an area that is a large, round, psychologically significant figure, and an area where we had seen both support and resistance previously.
• Because of this, it’s very likely that we will continue to see that area as important.

Waiting for the Federal Reserve

The 200-Day EMA hangs around the 12,600 level and is dropping from here. Because of this, I think somewhere between here and there we will get the correct exhaustion candle to start shorting. I don’t necessarily want to chase this market out there, although short-term traders will more likely than not continue to chase the trade. There’s also probably a significant amount of short covering going on, and that of course has a major influence on the market.

At this point, we may have a little bit further to go to the upside, but I also recognize that the longer-term trend still favors the overall downward pressure. I think a little bit of patience will go a long way in this market, and thereby give you an opportunity to make much bigger trades instead of trying to chase the short-term momentum in this market. The last couple candlesticks have been very bullish, but we still must worry about whether the Federal Reserve is going to tighten everything. I do think they will, mainly because that’s exactly what they have been saying for a while. The Federal Reserve caused this mess about people believing they are going to bail everybody out, so it’s their problem to fix.

S&P 500 Forecast: Continues to Rally into the Weekend

Bear market rallies tend to be extraordinarily vicious, and therefore I think it’s likely that we are going to continue to see people lose money.

• The S&P 500 has rallied on Friday to break toward the 4000 level, an area that I think it makes a lot of sense that we would target based upon the fact that it is a large, round, psychologically significant figure.
• However, should probably be noted that even though the day was green, it was nowhere near the exuberance that we had seen during the previous session.

Pay Close Attention to the Bond Markets

Furthermore, people have delusions that the Federal Reserve is suddenly going to loosen its monetary policy or at least pause. Even if they were going to pause, they are going to stay tight for quite some time, and therefore it’s likely that risk assets will suffer over the longer term. This move has been a bit ridiculous, but if you have made good money off the move, then it might be time to start thinking about tightening up your stop losses. If you are outside of the market like I am currently, then you are looking for some type of exhaustion that you can get involved in. After all, we are still technically in a downtrend, even though we have seen one hell of a bounce.

The 3800-level underneath would be an area that we could target if we break down below the bottom of the trading session on Friday. At that point, we are also reaching towards the 50-Day EMA, so it all comes together quite nicely. Earnings season was “less bad” then some people thought, the forward guidance was absolute garbage. This tells you that a lot of people understand that profits are going to be harder to come by in the future, so this is simply a function of liquidity coming in and out of the bond market. If you’ll start to rise again in the bond market, this thing is going to get pounded.

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