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The Bounce Might Unfold, However Be Brief-lived


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US Index Technical Outlook:

  • S&P 500 could bounce round June lows, however decrease ranges and concern are nonetheless wanted
  • We’re getting there, taking place in October
  • S&P 500, Nasdaq 100, Dow Jones Technicals/Charts

Really helpful by Paul Robinson

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S&P 500, Dow Jones, Nasdaq 100 Outlook: Bounce Might Unfold, However Brief-Time period

Markets could bounce round June lows, however till we see a brand new low with some concern promoting, it does not appear like we will put in a everlasting backside. The S&P 500 is seeing some in a single day shopping for as international markets have recovered barely, however the bounce is prone to be short-lived, maybe till the mid-3700s.

Whenever you take a look at bear market value motion it’s fairly widespread {that a} bounce comes across the earlier low, generally after breaking it earlier. And a few of these rallies could be fierce, making it seem to be quick, however till we see the fabric set in a low-low and a few concern set in, it appears like we’ll hold the rally going for a very long time.

The VIX index is beginning to transfer up a bit, an indicator that I like to look at throughout these instances. More often than not the indicator does not present a lot helpful data, however when the markets go into liquidation mode and the VIX spikes is an excellent indicator to inform that you’re “getting there”. And in promoting this conduct is often to quick the market of some type.

Yesterday the VIX climbed nearer to 33, nevertheless it appears prefer it might want to attain 40 or larger on this journey, and earlier than we go quick within the inventory.

It seems we will not be too distant from this phenomenon, and would match nicely with the thought of ​​the market getting into a seasonal decline in October. However the considering is we cannot see that till the S&P reaches 3500/3400.

Really helpful by Paul Robinson

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S&P 500 Every day Chart

An image containing the histogram details is automatically generated

S&P 500 Chart by TradingView

Nasdaq 100 11037 must be cleared earlier than posting a brand new low, one thing that’s anticipated to be right here quickly. A bounce may take the index in direction of the 11500/700 space, with the August under channel line because the very higher restrict.

Nasdaq 100 Every day Chart

Chart, histogram details are automatically generated

Nasdaq 100 Chart by TradingView

Dow JonesIs in an fascinating place because it has already closed a brand new cycle low, and likewise closed under the 2020 excessive which marks the onset of COVID. The world round 29560/750 is now being seen as resistance. And whereas this will probably be revered at first, if we do get a pointy market squeeze it could nonetheless reclaim previous help however does not make a lot sense in doing so. New lows in SPX and NDX are nonetheless anticipated right here quickly. One place I see on the draw back is the massive US election hole of 6 November 2020, it stays at 28323. It’s lastly able to be crammed.

dow jones day by day chart

Chart, histogram details are automatically generated

Dow Jones Chart by TradingView

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— Written by Paul Robinson, Market Analyst

You may comply with Paul on Twitter @PaulRobinsonFX



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