#INDICES Forecast: #NASDAQ,#DOWJONES & #SP500 (01 FEBRUARY 2023)

NASDAQ 100 Forecast: Index Bounces From Previous Trendline

This is probably a good scalping environment.

• The NASDAQ 100 Index initially felt during the trading session on Tuesday, to reach down toward the downtrend line that we have seen cause quite a bit of dollar pressure in this market
• Recently, we had broken above there, and it does suggest that we have now tested it for potential support.
• This is interesting, considering that the FOMC meeting is occurring over the next 2 days, and we obviously have a major news announcement and press conference coming after that meeting concludes.

Good Scalping Environment for Range Bound Traders

It’s also worth noting that the 200-Day EMA sits just above, so I do think that we probably have a lot of noisy behavior just waiting to happen in this situation. The 200-Day EMA quite often attracts a lot of attention, so you need to think of it in the terms of a lot of noise, and more or less a grind when it comes to the attitude. Alternatively, the market will be paying close attention to Jerome Powell, and what he has to say as far as monetary policy. Furthermore, we also have the jobs number at the end of the week, so that will more likely than not have a lot to say as well.

A breakdown below the lows of the trading session on Tuesday falls below the downtrend line and starts to look at the 50-Day EMA as a target. I’m not exactly sure which direction were going to go yet, but we are most certainly at an area where we are going to have to make a bigger decision. The safest way to play this market is to let it form some type of impulsive candlestick and then follow it. This will be especially true if it’s after the day on Wednesday, or even Friday.

In the meantime, I think you view our range bound trader, it’s probably good scalping environment. I have been playing the NASDAQ 100 on short-term charts as far as day trading is concerned, but this is with a very small position size and quite frankly it’s more or less just to entertain myself. After all, I’m not risking enough to cause any real damage to my account, and that’s probably the most important thing you can do right now is to protect yourself from massive swings. Ultimately, this is a situation that could be very noisy, but at this point we should be getting very close to a your move.

S&P 500 Forecast: Index Bounces From Its Previous Downtrend Line

You need to be very cautious about the markets, because if we do chop through a couple of support levels, then it’s likely that we collapse.

• The S&P 500 Index has been positive during the trading session on Tuesday, as the FOMC Meeting begins.
• Ultimately, it’ll be interesting to see of this plays out, due to the fact that the markets will probably be very noisy after the FOMC meeting, the interest rate hike, the statement, and most certainly the press conference.
• After all, this is all about whether or not the Federal Reserve is going to continue to liquefy the markets and hand Wall Street cheap money.

S&P 500 Today's Trading Outlook

The 200-Day EMA sits underneath the trendline, and therefore has a lot of influence on this market. It’s essentially near the 4000 level, and of course the 4000 has a certain amount of psychology attached to it as it is a large, round, psychologically significant round figure. Looking at this chart, you can also make an argument that the 50-Day EMA is trying to turn toward the 200-Day EMA, so from a technical analysis standpoint, it does look like the market is starting to break out and go much higher. It’ll be interesting to see on this plays out, but I think at this point, the real tell will be by the end of the week as we will not only gotten through the press conference after the FOMC meeting, but we also have the jobs number on Friday that will obviously have an influence as well. We can break above the 4100 level, then I think the market is truly broken out and is clear of a lot of noise.

On the other hand, if we break down below the 50-Day EMA, it’s very likely that we would threaten the 3900 level, and then more likely than not after that is an opportunity to get down to the 3800 level. The 3800 level being broken below to the downside would open up quite a bit of selling pressure down to the 3600 level. Because of this, I think you need to be very cautious about the markets, because if we do chop through a couple of support levels, then it’s likely that we collapse. I think this week will be very crucial, because quite frankly the market continues to completely ignore the Federal Reserve. If they can’t get their message across finally, I suspect that we will see “tighter for longer” due to the fact that the Federal Reserve continues look at inflation as still far too strong, and higher stock market pricing does nothing to help the psychology of consumers to slow down.

Dow Jones Technical Analysis: The Index is Preparing to Attack Stubborn Resistance

Technically, the index's rise came amid the continuation of the positive pressure for its trading above the simple moving average for the previous 50-day period.

• The Dow Jones Industrial Average rose in its recent trading on the intraday levels, to achieve strong gains in its last sessions by 1.09%.
• The index added about 368.95 points, to settle at the end of trading at the level of 34,086.05 after the index fell during Monday’s trading by -0.77. %.
• The index recorded gains during the month of January, at a rate of 2.8%.

The stock market ended the first month of 2023 with healthy gains, despite widespread concern that the economy may be on the brink of recession.

The Federal Open Market Committee kicked off its two-day rate-setting monetary policy meeting on Tuesday, with near-certain expectations of a quarter-percentage-point hike. Eyes are on comments to be released in the bank's statement and press conference with Chair Jerome Powell following the rate decision.

Traders also expected a further quarter-point hike in March, followed by a pause and then one or two cuts before the end of the year. However, Fed policymakers from at least December don't all see rate cuts until 2024.

On the economic data front, growth in US labor costs slowed in December, suggesting that the Fed's aggressive approach to taming inflation is likely to ease on Wednesday.

An article by a well-sourced Fed reporter from the Wall Street Journal noted that employment cost data could influence central bank decision-making going forward.

The S&P CoreLogic Case-Shiller Index, which measures home prices in 20 cities, fell 0.5% in November, the fifth consecutive month of decline, matching expectations.

Dow Jones Technical Analysis

Technically, the index's rise came amid the continuation of the positive pressure for its trading above the simple moving average for the previous 50-day period. Under the control of a bullish corrective wave in the short term along a slope line, as shown in the attached chart for a (daily) period.

Therefore, our expectations indicate more rises for the index during its upcoming trading, but on the condition that it must first surpass the important and stubborn 34,281.36 resistance level, to assure us of its determination to continue the rise, to then target the first resistance level at 35,361.36.

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#DowJones Technical Analysis: The Index is Settling Lower,Almost Unchanged (8 December 2022)

The central bank is expected to raise interest rates by half a percentage point at its meeting next week and has raised the benchmark interest rate six times since March.

• The Dow Jones Industrial Average settled unchanged during its recent trading on intraday levels, achieving almost unnoticed gains, gaining about 1.58 points only.
• It settled at the end of trading at the level of 33,597.93, after falling sharply during Tuesday's trading by -1.03%.
• The index declined during the current week as, by the moment of writing this report, it dropped by -2.42%.

There weren't much economic data on Wednesday but markets are waiting for more important data than the weekly jobless claims data later in the day, as the labor market was a strong sector of the slowing economy. This made it difficult for the Fed to tame inflation, the government will also release a report on Friday that will provide more detail on how inflation is affecting business. The University of Michigan will release its December survey of consumer sentiment on Friday.

The reports do not usually move the markets but they get a lot of attention because they will give more clues about how the Federal Reserve will handle the pace of rate hikes in the future, especially before its meeting next week.

The central bank is expected to raise interest rates by half a percentage point at its meeting next week and has raised the benchmark interest rate six times since March. It pushed it to a range of 3.75% to 4%, the highest rate in 15 years, Wall Street expects. That the benchmark price will reach a peak range of between 5% and 5.25% by mid-2023.

Meanwhile, the Labor Department said on Wednesday that non-farm productivity measures the change in output per worker. It rose at an annualized rate of 0.8% in the latest quarter.

Dow Jones Technical Analysis

Technically, the index is trying, in its recent trading, to search for a bullish bottom from which to base it to help it gain the necessary positive momentum to restore its recovery and rise again. The index is affected by an earlier breach of a bearish corrective slope line in the short term, as shown in the attached chart for a period (daily). Positive pressure continued for its trading above its simple moving average for the previous 50-day period, and we note during that that the relative strength indicators have reached areas that are highly oversold. This was exaggerated compared to the movement of the index, which suggests the start of a positive divergence in it.

Therefore, our expectations suggest that the index will rise again during its upcoming trading, as long as the 33,248.61 support remains stable,to target once again the important and stubborn 34,281.36 resistance level.

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#INDICES Forecast: #NASDAQ,#DOWJONES & #SP500 (15 NOVEMBER 2022)

Dow Jones Technical Analysis: The Index Takes Profits

Investors focused on comments by Federal Reserve Vice Chair Lail Brainard, in a live interview with Bloomberg.

• The Dow Jones Industrial Average declined during its recent trading at the intraday levels, to record losses in its last sessions, by -0.63%.
• The index lost the index by -211.16 points, settling at the end of trading at the level of 33,536.71, after rising in Friday's trading by 0.10%.
• On the last trading day of the week, the index had a gain of 4.15%.

Dow Jones Technical Analysis

Technically, the index’s decline comes as an attempt to reap the profits of its previous rises. To try to gain some positive momentum that may help it recover and rise again, amidst its impact on the breach of a bearish corrective slope in the short term. This is shown in the attached chart for a (daily) period, with the continuation of the positive support for its trading above its simple moving average for the previous 50 days. In addition to this, we notice the start of the influx of positive signals on the relative strength indicators, after the indicator succeeded in discharging its overbought, which was evident in it earlier.

Therefore, we expect the index to return to the upside during its upcoming trading, provided that the 32,504.00 support level remains intact, to target the important and nearby 34,281.36 resistance level, in preparation for attacking it.

S&P 500 Forecast: Pulls Back from 200-Day EMA

So far, everybody on the Federal Reserve Board continues to reiterate the idea of a tight monetary policy going forward, so I just don’t see why the market is trying to front-run something that’s not going to happen.

• The S&P 500 pulled back from the 200-Day EMA during the trading session on Monday, as well as the 4000 level.
• There is a lot of noise in this area, so I suspect that we are probably going to see a little bit of a pullback.
• Whether or not this was the top of the short-term rally is a completely different question, but it should be noted that there is a huge options barrier in that area that people will be paying close attention to. It is because of this that I think it’s more likely than not we get a pullback in the short term.

Stocks Likely to Keep Losing Ground

On the other hand, if we do break above the 200-Day EMA, then it’s possible that we could go looking to the 4200 level. The 4200 level is followed by the 4300 level, but I have a hard time believing that we are going to get to that area without the Federal Reserve truly stepping back. So far, everybody on the Federal Reserve Board continues to reiterate the idea of a tight monetary policy going forward, so I just don’t see why the market is trying to front-run something that’s not going to happen.

Nonetheless, that’s exactly what has been happening, but another potential issue is out there, with contagion coming out of the crypto markets. More and more firms are learning that they have lost a ton of money in the FTX Ponzi scheme. Keep in mind that they will have to sell things that they own in order to cover some of the losses that they will never get their hands on again. Because of this, we may see selling in some of the most random places that you would think have very little to do it crypto.

NASDAQ 100 Forecast: Has a Sluggish Monday

Pay close attention to the fact that the bond market was closed on Friday, which was part of the 2D massive squeeze that we had seen.

• The NASDAQ 100 has gapped lower to kick off the trading week, showing signs of sluggish behavior.
• At this point, the market is more likely than not going to continue to try to go higher, but one of the main things you should be paying attention to is the bond market right now.
• After all, if interest rates start to rise again, that would be an extraordinarily negative influence on this market, as technology stocks tend to get hammered in that environment.

Pay close attention to the fact that the bond market was closed on Friday, which was part of the 2D massive squeeze that we had seen. While I recognize that we broke through a little bit of minor resistance, the reality is that the fundamentals still do not line up quite right for the NASDAQ 100 to take off. Ultimately, the overall attitude of the market will continue to be noisy, so therefore you need to be cautious about jumping “all in.”

I Remain Bearish Despite the Volatility

The 50-Day EMA has been somewhat important as of late, so it could offer a little bit of support. If we break down below there, then it’s likely that the market will try to fill the gap from last week, which could open the possibility of a move down to the 11,000 level. Anything below there could open a huge move lower.

The Federal Reserve is nowhere near loosening monetary policy, even though Wall Street is kicking and screaming for it. Lael Brainard sounded somewhat dovish during the day, so that may have had something to do with some of the positivity. However, I would point out that late in the day the NASDAQ 100, or the other risk assets out there did not behave very well. Because of this, we could very well find ourselves slipping back into the consolidation area that we had been in for a while. I’m not completely sold on the idea of going higher, but if we broke above the 12,000 level it is possible that we could go looking to the 200-Day EMA near the 12,500 level. Ultimately, I’m still bearish but I recognize that we have a lot of volatility ahead of us, so there’s no need to jump into the market in one direction or the other.

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#INDICES Forecast: #NASDAQ,#DOWJONES & #SP500 (8 NOVEMBER 2022)

Dow Jones Technical Analysis: Index Rises Along a Bearish Corrective Slope

Investors are now focused on the midterm elections later Tuesday, which will determine which party will control Congress.

The Dow Jones Industrial Average rose during its recent trading at the intraday levels, to achieve gains for the second consecutive day. It went up by 1.31%, to gain about 423.78 points, and settled at the end of trading at the level of 32,827.01, after rising by 1.26% in Friday's trading.

The Dow jumped more than 400 points on Monday, led by gains in shares of Walgreens Boots Alliance Inc. WBA shares 4.10%, Salesforce Inc CRM shares 3.45%, Boeing Co. BA at 3.06%.

Investors are now focused on the midterm elections later Tuesday, which will determine which party will control Congress. That's because there is a potential for tax hikes, and any kind of massive spending is likely to be viewed as inflationary.

Traders are divided over whether the Federal Reserve will raise interest rates by 50 basis points or 75 basis points at the US central bank meeting in December.

Dow Jones Technical Analysis

Technically, the index’s rise comes with the support of its continuous trading above its simple moving average for the previous 50 days. In front of that the index continues to move along a corrective bearish slope line in the short term, as shown in the attached chart for a (daily) period, with the influx of negative signals on the strength indicators. This is relative, after reaching earlier areas of severe overbought.

Therefore, our expectations still suggest a return to the index's decline during its upcoming trading, throughout the stability of the important 33,272.30 resistance level, to target the first support level, at 31,598.50.

NASDAQ 100 Forecast: Has Positive Session to Kick Off the Week

At that point, I’d be looking for the NASDAQ 100 to hit the 10,500 level, followed by the 10,000 level.

• The NASDAQ 100 has rallied about 1% during the trading session on Monday, as we are hanging around the 11,000 level.
• Keep in mind that the NASDAQ 100 is heavily influenced by a lot of the major technological company such as Tesla, Microsoft, Amazon, Google, and the like.
• Ultimately, it is very sensitive to interest rates, so if we do see rates rally a bit in the United States, then it’s likely that we will continue to see the NASDAQ 100 struggle.

If we do continue to go higher, then I’m going to be paying close attention to the 50-Day EMA, which is currently sitting near the 11,500 level, and dropping. Beyond that, we also must look at the 11,750 level, which also has been structurally resistant. I think at this point, a lot of people were looking at this through the prism of a potential “double bottom”, and a lot of people are hoping this is the bottom finally. It’s difficult to think that is going to happen anytime soon, so I’m looking for rallies now to show signs of exhaustion that I can take advantage of. If we do break above the 11,750 level, then it’s possible that we could go much higher, but I think that is going to be the hardest way to go.

Waiting for a Shorting Opportunity

If we break down below the double bottom, then it’s likely that we could continue to see a massive selloff, probably something along the lines of a meltdown. At that point, I’d be looking for the NASDAQ 100 to hit the 10,500 level, followed by the 10,000 level. At this point, it is very unlikely that we continue to see rallies be able to stick, mainly because there’s so many negative things out there. With that being the case, I think it’s only a matter of time before you get a nice shorting opportunity.

If we did take off to the outside, then we would need to see some type of Federal Reserve action, or perhaps slowdown in its aggressive monetary policy to make a rally mean anything, so therefore it’s likely that we would continue to see it as a bit suspicious until the Federal Reserve gives the “all clear.”

S&P 500 Forecast: Bounces Toward the 50-Day EMA

When I look at the chart, it looks as if we are trying to form some type of bottoming pattern, but at this point, we have not proven it quite yet. Yes, we had broken the above resistance at one point, but then turned around to show signs of weakness, to begin with.

• The S&P 500 has rallied a bit during the trading session on Monday, as we continue to see a lot of volatility.
• The market is sitting right around the 3800 level. The 3800 level has been difficult to get beyond a couple of times, but the question now is whether we can finally make it stick. The market seems to be waiting for some type of confirmation that the Federal Reserve will pivot.
• Quite frankly, it’s just setting itself up for disappointment. At this point, it’s likely that we will continue to see signs of exhaustion as selling opportunities, but at this point, it looks like the short-term momentum is to the upside.

The Federal Reserve has several speakers this week that could come out and cause problems, so I suspect that it’s only a matter time before the Bears come back down. It will break down below the lows of the last couple of days, it’s likely that the market could go down to the 3600 level. That is a large, round, psychologically important figure. At this point, that is an area where it’s likely that we would see a lot of momentum to break out of this range, but quite frankly we could very well see some type of shock to the system as somebody somewhere will say something.

Be Cautious

When I look at the chart, it looks as if we are trying to form some type of bottoming pattern, but at this point, we have not proven it quite yet. Yes, we had broken the above resistance at one point, but then turned around to show signs of weakness, to begin with. The 50-Day EMA will offer a certain amount of interest, but really at this point if we can break above there is possible that we could go to the 3900 level, and then perhaps even the 4000 level where we have the 200-Day EMA.

Looking at this chart, it’s likely that we will continue to see a lot of volatility, but that should be nothing new if you been playing the market anytime recently. I think at this point, you need to be very cautious with the position size that you use because quite frankly I think we are going to see more volatility, not less of it going forward.

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#INDICES Forecast: #NASDAQ,#DOWJONES & #SP500 (7 NOVEMBER 2022)

Dow Jones Technical Analysis: Index Closes Cautiously Higher

The Dow Jones Industrial Average rose during its recent trading at the intraday levels, to break a series of losses that continued for four consecutive sessions.

The Dow Jones achieved strong gains in its last sessions, by 1.26%, to gain about 401.97 points, and to settle at the end of trading at the level of 32,403.23. This happened after its decline -0.46% in Thursday, but despite that, the index recorded weekly losses of -1.40%.

• Investors digested the mixed jobs report which raised hopes that the Federal Reserve will shift interest rates in the future to less severe degrees.
• However, the Nonfarm Payrolls report also showed that average hourly earnings rose 0.4% in October versus expectations of 0.3%, while job growth was stronger than expected.

Traders' bets on a 75bp rate hike in December rose briefly after the jobs report, but then eased back to split between the odds of a 50bp and 75bp hike.

Dow Jones Technical Analysis:

Technically, the Dow Jones' rise comes with the support of its continuous trading above its simple moving average for the previous 50 days. The index remains suffering from negative pressure due to its trading along a corrective bearish trend line in the short term, with the start of negative signals in the relative strength indicators. This happened after they reached areas of severe saturation with buying operations, as shown in the attached chart for a period (daily).

Therefore, our expectations suggest a return to the index's decline during its upcoming trading, as long as the resistance remains at 33,272.34, to target the first support levels at 31,598.60.

S&P 500 Forecast: Continues to Show Weakness

Earnings have been okay, but to think that they will continue to be in this macroeconomic environment is wishful thinking at best.

• The S&P 500 has continued to show weakness during the trading session on Friday as the volatility continues to wipe traders out.
• With that being the case, I do think that we probably have more negativity ahead than anything else, so you need to be very cautious.
• Keep in mind that most of what’s going on right now is all about the Federal Reserve and what they are getting ready to do, and Wall Street is already trying to convince itself that the Federal Reserve is going to slow down its tightening policy, even though Jerome Powell just told them that he was not going to. Hope burns eternal I suppose.

Market Likely to Face Pressure

This has been a very difficult market to trade in recently, and I don’t think that’s going to be going away anytime soon. The best thing that I have been able to figure out is simply fading rallies as they occur, at least with the first signs of exhaustion. You should also keep in mind that as the US dollar and interest rates rise in America, that puts even more pressure on this market, and the lack of growth is going to be a real concern going forward.

Whether or not the S&P 500 can break above 3900 arrange to be seen, but that would obviously be a bullish turn of events. In that environment, we probably make a run towards the 200-Day EMA, which is sitting just above the 4000 level. Nonetheless, I’m very cautious now and recognize that the downside continues to lead the way most days.

NASDAQ 100 Forecast: Continues to See Downward Pressure Despite Initial Pop

The Federal Reserve has reiterated this week that they are going to continue to fight inflation, and therefore remain tight for longer than people thought.

• The NASDAQ 100 initially gapped to the upside during the training session on Friday, as markets initially took off to the upside after the jobs number.
• The market has given back all of the gains rather rapidly, and it does suggest that perhaps going to continue to see the downtrend take hold again.
• Ultimately, this is a market that had broken above the downtrend line, and now it is breaking back through. Now it’s very likely that we are getting ready to go much lower.

Continue to be Bearish

The jobs number was slightly higher than anticipated, and therefore you need to pay close attention to the fact that the Federal Reserve still has no reason to loosen monetary policy, and therefore stocks will continue to take a bit of a beating. Ultimately, this is a situation where risk appetite is getting eviscerated, and I do think that it’s only a matter of time before you see all these rallies sold off. In fact, it’s not until we break above the 50-Day EMA that I would look at this chart as one that starting to look positive.

If we did break above the 50-Day EMA, it would confirm a bit of a double bottom and a potential “W pattern.” The market would of course look very bullish at that point, but quite frankly I just don’t see how that happens in this environment and clearly, we have seen a lot of damage done as of late. If that’s going to be the case, there’s no reason to get overly excited about owning stocks, especially technological stocks which tend to be especially sensitive to interest rate headwinds and risk-off behavior. With that being the case, I continue to be bearish on this market and just don’t see how we would be changing anytime soon.

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#INDICES Forecast: #DowJones,#NASDAQ,#DAX & #SP500 (27 OCTOBER 2022)

Dow Jones Industrial Average:

On the H4 chart, the overall bias for DJI is bullish. To add confluence to this, the price is above the Ichimoku cloud which indicates a bullish market. Overnight, price had massive bullish momentum upwards due to the weakening of the DXY. Price has tapped into the 1st resistance at 31896.61, where the 61.8% and 50% Fibonacci lines are and is currently resting under it. If this bullish momentum continues, expect price to possibly break above the 1st resistance at 31896.61 and head towards the 2nd resistance at 34293.93 where the previous swing high and 100% Fibonacci line is located.

Areas of consideration:

• H4 time frame, 1st support at 29653.29
• H4 time frame, 1st Resistance at 31896.61
• H4 time frame, 2nd Resistance at 34293.93

DAX:

On the H4 chart, the overall bias for DAX is bearish. However, price has now closed above the Ichimoku cloud which indicates a change to bullish market momentum. Expecting price to possibly continue this bullish momentum and head towards the 1st resistance at 13490.91, where the 78.6% Fibonacci line is located. If the 1st resistance is broken, the 2nd resistance could be at 14717.44, which is in line with the previous swing high. Alternatively, the price may drop to the 1st support at 12548.42, which is in line with the swing low.

Areas of consideration:

• H4 time frame, current price
• H4 time frame, 1st resistance at 13490.91

S&P 500:

On the H4 chart, the overall bias for S&P500 is bearish. However due to the weakening of the DXY, S&P500 had bullish momentum during the course of this week. Overnight, price has consolidated above the 1st support at 3811.03 where the 38.2% Fibonacci line is located. If this bullish momentum continues, expect price to possibly head towards the 1st resistance at 4016.04 where the 61.8% Fibonacci line and 23.6% Fibonacci projection line is located.

Areas of consideration:

• H4 time frame, 1st support at 3811.03
• H4 time frame, 1st resistance at 4016.04

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#INDICES Forecast: #DOWJONES,#NASDAQ,#DAX & #SP500 (23 AUGUST 2022)

 

DAX Forecast: Plunged at the Open on Monday

The Dax German index plunged drastically during the trading session on Monday, losing over 2.25%. The market is absorbing the idea that the Russians are going to shut down part of the Nordstream pipeline system, thereby punishing Europe yet again for a few days. This is extensively to do a bit of maintenance, but either way, it demonstrates acutely just how vulnerable the European Union is right now.

If natural gas starts to get cut off again, it’s likely that we would see the German economy get hit especially hard, because its manufacturing base is so crucial. Because of this, we have seen companies in Germany sell-off during the day, which makes perfect sense. Furthermore, we also have central bankers speaking at Jackson Hole this week and are likely to continue seeing the opportunity as a possible way to push the markets lower as the central banks around the world tightening monetary policy will work against stock markets.

The €13,000 level underneath is likely to be a bit of a floor but considering that we have fallen as hard as we have, it would not surprise me at all to see this market continue going lower. Underneath, the €12,500 level is an area that you need to pay close attention to, and of course, recognize that we have already formed a bit of a “double bottom” in that area. Breaking below that area would obviously set markets on fire, but right now that is still off in the distance.

Rallies at this point will have to deal with the 50 Day EMA, which is at the top of the candlestick for the Monday session. If we rally from there, then the €14,000 level should be paid close attention to, as it’s where we had pulled back from, and it’s just below the 200 Day EMA indicator, something that a lot of people will pay close attention to.

• I think it continues to be a “pay the rally” type of situation as Germany will continue to struggle through the prism of a European Union that is in trouble.
• The size of the candlestick for the day suggests that we must certainly have further downside ahead.
• We continue to expect that DAX to continue going lower over the next several sessions.
• Fading rallies will continue to be my trade strategy going forward.

NASDAQ 100 Forecast: Continues to Selloff

The NASDAQ 100 has fallen hard during the trading session on Monday, as we continue to see a lot of negativity. The 50-Day EMA is currently rising higher, and it should show a certain amount of support. However, if we break through there, then the next target will more likely than not end up being the 12,500 level.

The NASDAQ 100 of course is very susceptible to noise as there are only 7 stocks that move the thing for the most part, so you would do well to follow Tesla, Apple, Microsoft, Alphabet, and all of the usual suspects. As interest rates continue to show signs of strength and central banks around the world look to be very tight with monetary policy, that does tend to work against the value of these types of companies, so it all ties in together quite nicely. It’s also worth noting that we close at the very bottom of the candlestick, so it looks like we are ready to test the major support level in the form of the 50 Day EMA and the previous noise between there and the 12,500 level.

Strategies for trading Nasdaq today

If we were to break down below that level, then it’s likely that the market could go to the 12,000 level. On the other hand, if we were to turn around and reach higher, the 200 Day EMA sits just below the 13,500 level, and therefore it should offer a bit of resistance, therefore I think it’ll take a lot of effort to get above there. If we can break above all of them, then fine, we will go much higher. This week should be crucial for the markets, and by the time we take off for the weekend, we should have a good idea as to where things are going to end up.

• I would anticipate a lot of noise more than anything else, so be aware of the fact that the markets are going to be difficult to navigate going forward.
• We continue to see a lot of headline noise cause headaches for most traders.
• The next couple of days are going to be difficult and crucial, so make sure you keep your position size reasonable.
• I do believe the we will get a longer-term answer, but we need to let the market tell us what it wants to do.

S&P 500 Forecast: Looking at Noisy Behavior

The S&P 500 plunged significantly during the trading session on Monday, as we have seen a lot of negativity. The market continues to see a lot of noisy behavior, as we are heading into the Jackson Hole Symposium week. By selling off the way we have, it’s obvious that traders are suddenly starting to worry about central bankers and whether or not they are going to continue to argue for tightening monetary policy.

It is likely that we will continue to see reasons to do so, as inflation has been extraordinarily strong. With that in mind, the market is likely to continue being a bit skittish, and it is probably worth noting that we are sitting right on a “ledge” that had formed previously in the form of the 4135 if we break through this area, that could be the beginning of a rather significant selloff.

If we rally from here, the 200-Day EMA is an area that I think a lot of people would pay close attention to, because it is a rather bullish thing to overcome. At that point, the market is likely to look into the 4300 level. I don’t necessarily think that’s going to happen easily, and I would fully anticipate that the Jackson Hole Symposium is a long litany of central bankers going on about how they need to tighten monetary policy. In other words, we may have seen the top of the rally. However, we do not know what happens until it happens.

Forecast for S&P 500

If the market were to break above the highs right around the 4300 level, that would be a very bullish sign, perhaps sending the S&P 500 to the 4500 level. I don’t necessarily know the reason for that happening. It is rather amazing how Wall Street can find one reason or another to get bullish, most of the time involving the idea that the Federal Reserve is going to continue to be dovish. I’m not sure what else the Federal Reserve can do to convince Wall Street that it is serious, but something tells me this week we will see everything but dovish behavior coming out of central bankers, with perhaps the exception of Japan. With this, I think rallies will get faded at the first signs of exhaustion as well. I have no interest in buying into it make it fresh, new high.

Dow Jones Technical Analysis: Index Records Worst Day

The Dow Jones Industrial Average saw its biggest one-day, pips, and percentage loss since June 16th.

The Dow Jones Industrial Average closed sharply lower during its recent trading at the intraday levels, to record losses for the second consecutive session, by -1.91%. The index lost about -643.13 points and settled at the end of trading at the level of 33,063.62, after its decline in trading last Friday by -0.86%. It ended the week's trading with a decrease of -0.16%.

The Dow Jones Industrial Average saw its biggest one-day, pips, and percentage loss since June 16th, as investors remained concerned about the possibility of another aggressive rate hike.

Federal Reserve Chairman Jerome Powell and other central bank officials and policymakers will gather this week at the annual Jackson Hole event. Powell is due to deliver a speech on the economic outlook on Friday, and investors will hear any indication of whether a 50 basis point or 75 basis point increase is likely at the September FOMC meeting.

The probability of the Fed raising rates by 75 basis points to a range of 3% to 3.25% increased to nearly 54% as of Monday, compared to 47% on Friday and 39% a week ago.

Investors will also be looking for details about the Fed's plans to cut its roughly $9 trillion balance sheet, a process that began in June.

Dow Jones Technical Outlook

• Technically, the index previously faced a strong resistance represented by a bearish trend line in the medium term.
• This is shown in the attached chart for a (daily) period.
• This coincided with the start of negative signals on the relative strength indicators, after they reached at the same time overbought areas.
• It caused increasing pressure on the index to break in its recent trading the 33,240 support level.

All of this comes in light of the dominance of a bullish corrective wave in the short term, supported by its continuous trading above its simple moving average for the previous 50 days. It represents the last stronghold of support that could gain it the necessary positive momentum and give it the ability to regain its recovery.

Therefore, given the index's stability below 33,240, we expect it to decline further during its upcoming trading, to target the support level 32,273.

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#INDICES ANALYSIS: #DOWJONES,#SP500,#NASDAQ100 (19 JULY 2022)

 

Dow Jones Industrial Technical Analysis: Biggest Loss in Over Two Weeks

The Dow Jones Industrial Average declined during its recent trading at the intraday levels, after erasing its early gains for the session, to close its last session with a decrease of -0.69%. The index lost -215.64 points, to settle at the end of trading at the level of 31,072.62, after rising in the day’s trading. Friday by 2.15%, but despite that it recorded losses during the past week by -0.17%.

In economic news, the probability of the Federal Reserve raising its target rate by 100 basis points was 31%, after hitting 80% last Wednesday, according to CME Group's FedWatch tool.

The National Association of Home Builders' monthly housing market index fell to a reading of 55 in July from 67 in June, well below expectations of a reading of 65 in a Bloomberg survey.

Technically, the index was subjected to negative pressure as a result of touching the resistance of its simple moving average for the previous 50 days, and this coincided with testing a correctional and descending branch line in the short term, as shown in the attached chart for a (daily) time period, for the index to surrender to this negative pressure, rebounding from Its early gains during the session and ends with losses that are the largest in percentage terms in more than two weeks.

Therefore, our expectations indicate more decline for the index during its upcoming trading, as long as the resistance level 31,885 remains intact, to target again the pivotal support level 29,653.30.

S&P 500 Forecast: Index Gives Up Gains at 50-Day EMA

To think that the market is suddenly going to change its overall attitude in the blink of an eye is asking a lot.

The S&P 500 initially rallied on Monday but gave back gains as soon as we got to the 50-day EMA. The 3950 level is an area where we have seen sellers previously, so it does make sense that we continue to see a lot of resistance in that area, and as you can see on the chart, I have a couple of levels marked that I believe are going to be important. Because of this, it’s more likely than not going to be a situation where we are looking at the potential for more of a back-and-forth type of situation.

On the other hand, if we were to break above the 3950 level, then we could threaten the 4000 level. Breaking above the 4000 level then opens up the possibility of a move to the 4200 level. Anything above the 4200 level would be a massive change in attitude and trend, but I just don’t see that happening unless the Federal Reserve does something to give the market hope of a loosening monetary policy stance. That being said, the market will continue to be very noisy and jittery, so you will have to be cautious with your position size.

If we can break down below the 3700 level, then the market could really start to fall apart. That being said, it’s very unlikely it will happen and therefore I think what we have is a situation where we just go back and forth. Whether or not we break out of this range in the short term remains to be seen, but clearly, we are paying close attention to this area so I think you should look at this much like many of the other markets right now, that you should be more range bound trading, but looking more toward the downside than anything else, as there is a lot of fear out there. To think that the market is suddenly going to change its overall attitude in the blink of an eye is asking a lot. Because of this, I’m looking at this through the prism of a market that is trying to stabilize a bit but is not ready to change its overall trend. However, if we break 4200, then we will more likely than not enter a bullish market again.

NASDAQ 100 Forecast: Struggling Near 50-Day EMA

I believe that Monday was a sharp reminder of just how finicky this market is going to be.

The NASDAQ 100 initially tried to rally Monday but has also failed just above the 50-day EMA. Pulling back the way we have, it does suggest that we are not ready to take off yet, and I’m keeping an eye on the 12,250 level to determine if there’s any real strength. Ultimately, I think this is a market that is probably going to go sideways for a while, so I do favor selling it, but truthfully I think this is more or less range-bound nonsense.

Looking at this chart, if we do drop I think we could fall to the 11,600 level, which is where we bounced from a few days ago. The market will continue to see a lot of noisy behavior because quite frankly there are people out there that believe the economy is perfectly fine, while others think that we are going to see a lot of recessionary headwinds, and perhaps more negativity. The Federal Reserve is going to tighten rates as much as they need to, and it’s likely that eventually, the technology stocks will continue to show major problems.

The NASDAQ 100 continues to cause some issues, and it’s likely that we will see quite a bit of noisy behavior. The market breaking above the 12,250 level could open up the possibility of a move to the 13,000 level, which is an area where we had both support and resistance at multiple times, and it’s likely that we have significant interest in the market in that area. If we were to break above the 13,000 level, then it’s likely that the market could go to the 14,000 level, perhaps even reaching the 200-day EMA. I don’t see that happening anytime soon, and I believe that Monday was a sharp reminder of just how finicky this market is going to be. After all, the market rallied a bit during the course of the trading session but then gave back those gains to show a severe lack of follow-through. With that being the case, you are probably going to be better off treating a range-bound system, with more of an emphasis on the short side as it certainly has more momentum. In general, this is a market that I think will continue to see a lot of volatility more than anything else.

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