NASDAQ, Dow Jones 30 and S&P 500 Weekly Forecast – US Indices Start Off Rough, but Rally in Back Half

NASDAQ 100 Technical Analysis

The NASDAQ 100 initially fell during the week, crashing into the 20,000 level, but has since spent most of its time rising. By doing so, it shows real resiliency, and it suggests that this market is eventually going to break out to a fresh new high.

There’s nothing on this chart that tells me I should be short of the market, and quite frankly, I think pullbacks will continue to be looked at as potential buying opportunities in a market that has been extraordinarily strong anyway. With a breakout above the swing high and the all-time high just underneath the 20,800 level. At that point in time, I anticipate that we will be looking to get to the 21,000 level.

Dow Jones 30 Technical Analysis

The Dow Jones 30 has had a rough week. However, what you don’t see on the weekly chart is that we formed a perfect hammer on Thursday, and Friday it looks like we are trying to bounce. So, with that being said, I do think that the buyers are coming in to pick up a little bit of value in the blue chip index, which makes a certain amount of sense considering that the Federal Reserve is out there loosening monetary policy, and the idea of stimulus almost certainly would incorporate most of these companies.

Furthermore, you have to keep in mind that we are in the midst of earnings season, so that does cause a little bit of noise, but quite frankly, the biggest problem that we’ve had during the week is interest rates in America spiking, especially in the 10 year as we have seen it sell off.

S&P 500 Technical Analysis

Over here in the S&P 500 we initially fell, but I think in this market we still have a lot of support right around the 5700 level and then again in the 5780 region. The S&P 500 is digesting several weeks in a row worth of gains, so a negative week or really wouldn’t be the worst case scenario. In fact, it offers a little bit of value that a lot of people will be looking for.

After all, the market has been straight up in the air, really the entire year, with the exception of a little bit of a drop back in August, but year to date, we are basically up about 25%, which is pretty stout. So, at this point, I think you are looking for buy on the dip type of scenarios, and as we go forward, we will get closer to that potential Santa Claus rally. And that of course has fund managers out there trying to chase performance.