NASDAQ, Dow Jones, SP 500 Forecast – US Indices Pull Back Slightly in Early Tuesday Trading

NASDAQ 100

The NASDAQ 100 pulled back just a bit during the early hours on Tuesday as we continue to see a lot of noisy behavior. Ultimately, this is a market that I think has a massive amount of support in the form of the 20,000 level.

The 20,000 level is a large round, psychologically significant figure. It’s an area that’s been noisy more than once and therefore I think it makes a lot of sense that we will continue to pay close attention to it. The rally has gone back and forth multiple times and I think at this point we are just simply building up the necessary pressure to add to the upward trajectory. The 20,700 level above is the target. And then once we break out above there, then the market kicks off the next leg higher.

Dow Jones 30

The Dow Jones 30 sold off early during the trading session continuing the selling pressure from the previous day. But you can see we already are starting to turn around a little bit on Tuesday morning, so I do think more likely than not, you are going to see quite a bit of value hunting going on in this region.

Even if we were to break down from here, there is a massive amount of support near the 41,900 level not only due to previous action, but also due to the 50 day EMA. Granted, that is about a thousand points below where we are currently, but that I think is about as deep as a correction as you’ll see. I don’t even think we will get there. I think at this point in time, you are starting to see people push back on the selling pressure.

S&P 500

The S&P 500 continues to consolidate, and we are at the bottom of the range for the last six or seven trading sessions. But again, it’s starting to bounce a bit. So, I suspect this is probably more or less consolidation trying to chew up and digest some of those massive gains that we had seen previously.

The 5,900 level is an obvious area of resistance, and if we can break above there, then I think the S&P 500 has a real shot at reaching the 6,000 level. Either way, I don’t have any interest whatsoever in shorting this market, and I think if we did fall from here for whatever reason, the 50-day EMA would eventually offer a significant amount of support. At the time of recording, the 50 day EMA is currently near the 5,675 level and rising at a 45 degree angle. And of course there is a lot of price action between here and there anyway, but I would consider that your floor.