#Indices Forecast: #SP500,#DAX,#NASDAQ100 (22 March 2024)

DAX Forecast: Continues to Look Bullish Despite Pullback

DAX remains bullish despite pullbacks, with eyes on €18,250. ECB's hinted easing may boost momentum, supporting a surge towards €19,000 and long-term €20,000 targets.

• The German DAX initially did rallying during the trading session on Thursday, but pulled back a bit as it may be just a bit overstretched.
• Ultimately, this is a market that I still believe looks very bullish, and despite the fact that we couldn’t hang on to gain early on Thursday, the reality is that we are very much in an uptrend and there’s no reason to be fighting it.

ECB to the Rescue?

While the European Central Bank hasn’t explicitly said so, they have at least hinted that perhaps they may be open to the idea of loosening monetary policy later this year. As Germany is in a recession, that automatically puts a dent into roughly 1/3 of European GDP, and therefore the ECB will have to pay close attention to this. All things being equal, a short-term pullback is very likely, but I think that pullback would end up being a situation where a lot of people will be looking for momentum driven trading, as we have seen in New York, and for the same reason - liquidity. If the ECB starts to flood the market with liquidity, that will drive asset prices higher.

Underneath, I see plenty of support levels that are worth paying attention to. The first one would be the €18,000 level, followed closely by the €17,600 level. We also have the 50 day EMA underneath that would come into the picture, which is currently near the €17,400 level.

SP 500 Forecast: Continues to Look to the Upside

S&P 500 Aims Higher: Market buoyed by Powell’s remarks and momentum, with eyes on breaking 5300 level amidst expected Fed cuts and strong core stocks.

• The S&P 500 rallied slightly in the early hours on Thursday, as it looks like the markets are going to do everything, they can to continue going higher.
• This does make quite a bit of sense considering that Jerome Powell didn’t say anything to upset Wall Street.
• With that being the case, I think you have a situation where anytime you get a short-term pullback, you become a buyer yet again.
• Quite frankly, this is a market that is running on momentum right now, and that’s the only thing that matters.

Momentum Continues to Reign

The market has continued to be one that continues to show a lot of momentum, as traders jump in and try to chase the latest move. FOMO trading is a real thing in this market, and therefore think you get a situation where the traders are just simply looking for any opportunity or excuse they can to get involved in the market. Furthermore, the Federal Reserve is likely to continue to cut later this year, perhaps as much as 75 basis points, which is reason enough for Wall Street to blow up the latest bubble.

Keep in mind that the market is only driven on about 6 or 7 stocks, so as long as all of the usual suspects are rallying, this is a market that will continue to go higher. All things being equal, the market still has plenty of support underneath, with the 5000 level being a major floor in the market, especially now that we have the 50-Day EMA hanging around that area. It’s not until we break down below that area that I would be concerned, and even then I don’t necessarily know that the trend would be over, just that we might be more or less trying to find some type of reason to bring in the hot money yet again. Ultimately, the market is one that you cannot short, and therefore you have a situation where the market is one that you will either be sideways, or long. As far as the target is concerned, I believe that the S&P 500 is now starting to have thoughts about breaking above the 5300 level.

NASDAQ 100 Signal: Continues to See Upward Pressure

Potential Signal: I am a buyer of the NASDAQ 100 at the moment. I would have a stop loss at 17,928, with a target of 19,000.

• The NASDAQ 100 rallied early during the trading session on Thursday, as we continue to see a lot of bullish pressure.
• At this point, the market is likely to continue to see upward pressure in general, and I do think that every time this market pulls back at the look at it through the prism of a potential buying opportunity.

Wall Street Celebrates Federal Reserve Day

The Federal Reserve didn’t do anything to step away from the idea of 3 rate cuts this year, therefore it’s likely that we will continue to see a lot of buyers jumping into this market and trying to take advantage of the idea of each pullback through the prism of “momentum trading” that will continue. Keep in mind that the NASDAQ 100 is running on the idea of artificial intelligence more than anything else, as it is the one thing that everybody wants to own.

At this point in time, I think it’s probably only a matter of time before we go look into the 18,500 level, which I believe is the next target. Short-term pullbacks continue to see plenty of support underneath to hold the market higher, with the 18,200 level being one area that I think people will be interested in, followed of course find the 50-Day EMA underneath there. In general, the NASDAQ 100 is not something that you should be short of anyway, due to the fact that it’s not an equal weighted index so it’s not even designed to fall. Yes, it falls from time to time but at the end of the day it’s very difficult to see massive losses in this market.

I would not be surprised at all to see the NASDAQ 100 reach the 20,000 level sometime this year, and quite frankly I think a lot of people were thinking that as well. With that being the case, I remain “long only”, and will continue to look for opportunities to pick up “cheap contracts” in this index, and will ignore selling pressure for the time being, at least until the fundamental analysis changes, which is nowhere near doing so at the moment.

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