S&P 500, Nasdaq, Dow Jones technical forecast for the approaching week

Index Technical Forecast: Bearish

he was the one unhealthy week for shares As produced by all S&P 500, Nasdaq and Dow Jones bearish engulfing sample, Coming into the week, every index maintained a near-term bullish backdrop as costs reached recent near-term highs previously week, and these strikes have been prolonged within the early a part of the earlier week. However, Tuesday’s launch of CPI helped change that.

i observed this tuesday afternoonHighlighted how this was a mirror picture of the CPI’s response in October. On October 13, two months earlier than final week’s CPI launch, inflation printed above expectations and introduced an prompt jolt of concern into the equation. The inventory initially offered off, however quickly discovered assist and started rallying, exposing an extended decrease wick beneath that day by day candle. After which patrons fueled the rally-higher for the subsequent two months, till the bearish pattern of 2022 hit the excessive in early December.

that trendline It was briefly breached on Tuesday, earlier than sellers slammed the value beneath that degree, after which it continued to run by the FOMC assembly on Wednesday and caught one other wind on Thursday, breaching key assist. helped as all three indices moved to new month-to-month lows. The ascent

as i wrote final week’s forecast, I used to be anticipating a failed breakout past that trendline, nonetheless the timing has occurred quicker than I anticipated. long-term worth falling spike As for the S&P 500 which I mentioned final week, however it appears to be like like worth is trending in the direction of the decrease aspect of that formation.

s&p 500 weekly worth chart

chart ready by james stanley, S&P 500 on TradingView

S&P 500 degree

From the day by day chart we will get a transparent view of the transfer right down to the recent month-to-month low. The bearish response has been aggressive after Tuesday’s CPI print, and the previous space of ​​assist working from round 3912-3928 is now near-term resistance, after which the 4k degree comes into image. As for assist, the subsequent key space is across the 3800 degree, which helped set up the Could low and provided some resistance in October. is the confluence of Fibonacci Ranges On this space and if the bears can drive a breach, 3750 after which 3704 are rapidly again within the image.

s&p 500 day by day worth chart

chart ready by james stanley, S&P 500 on TradingView

nasdaq

The Nasdaq 100 ended the week with a fall to the Fibonacci degree at 11,294 to assist maintain the lows, however likewise, had a really bearish week that shifted management again to the sellers. The massive query right here in my thoughts is long run.

The Fibonacci retracement created by the pandemic key transfer helped mark the yearly low at 10,501. That is the 61.8% retracement of that formation and the 50% marker from the identical examine has additionally been crucial not too long ago, plotted round 11,700. That worth had helped set up assist for the prior 4 weeks, so the truth that the bears have been capable of mount a push beneath that degree, particularly after a failed breakout past the 2022 trendline, is the quick aspect of the matter. focuses on.

For the subsequent assist, I’m monitoring the 11,068, adopted by the ten,751 after which the ten,501 degree. The massive query I’ve is whether or not these ranges can play out in the previous few weeks of the 12 months or will it have to attend for early 2023 as a theme.

nasdaq 100 weekly chart

chart ready by james stanley, Nasdaq 100 on TradingView

Dow

Whereas each the S&P and Nasdaq set their annual lows on October 13, the Dow truly set a high-low that morning. And because the bulls returned, the Dow led the best way with a transfer of as much as 23.2% in only a few months. It was clearly an impression of the shorts being squeezed however it additionally appeared as if some legit accumulation was going down; And if we think about the upper price backdrop that can doubtless be within the image for 2023, it is comprehensible why blue chip equities might outperform tech, which is often extra delicate.

The Dow had a tough week, falling into recession just like the aforementioned S&P and Nasdaq; However there may be nonetheless an argument to be made for a bullish formation from the day by day chart as the value held assist from a former resistance trendline.

The 2023 trendline within the S&P 500 helped carry costs again final week, and the identical might be stated for the Nasdaq. However the Dow continues to be buying and selling above that degree, and that trendline is estimated at round 32,789, the very best since Sept. 13. A maintain of the assist might preserve the door open for short-term upside performs within the index. And for the subsequent resistance, the previous assist stays round 33,444, after which 33.707 comes into image.

dow jones day by day chart

chart ready by james stanley, Dow Jones on TradingView

— Written by James Stanley, Senior Strategist, DailyFX.com and Head of DailyFX Training

Get in contact and comply with James on Twitter: @JStanleyFX