NASDAQ, Dow Jones and S&P 500 Forecast – US Indices Look For Upward Momentum in Early Hours

Nasdaq 100 Technical Analysis

The Nasdaq 100 rallied a bit in the early hours on Thursday as traders got back to work from the New Year’s holiday. The 21,000 level seems to be an area of support. I think a lot of people will continue to pay close attention to it, especially now that the 50-day EMA is sitting right there as well. The market recently has made a couple of nasty moves lower, but when you look at the longer-term trend, it is still most decidedly to the upside.

So, I am a bit cautious about trying to get short of the NASDAQ 100 anytime soon. As a matter of fact, I’m really not going to consider it until we break down below the 20,000 level, which is quite some distance from here. This is not to say that the NASDAQ 100 has an easy path higher. It’s just that I think we’re more likely than not going to favor the upside as we consolidate.

Dow Jones Technical Analysis

The Dow Jones 30 rallied a bit in the early hours as well, and it almost looks like it’s forming a bit of a double bottom, with the 42,000 level underneath being crucial support. We’ll have to wait and see, but if we can break higher and clear the 50-day EMA, then we can take it on the 43,500 level. Anything above there opens up the possibility of a move to the 45,000 level.

I do think this is a very real possibility, but right now, I think more likely than not, we probably go sideways more than anything else as we wait for liquidity to pick up probably around the sixth. On Monday you’ll start to see more trading action and then of course we have the jobs number on the 10th, which is probably just as important if not more so.

S&P 500 Technical Analysis

The S&P 500 has rallied ever so slightly and now looks as if it is trying to break above the 50 day EMA and go looking to the 6,000 level. This is an index that I think has already started consolidation after the run higher. So, while I do favor the upside here, I’m not looking for a major move. The 5,800 level underneath continues to offer significant support, and I will treat it as a floor in the overall trend, at least at the moment.

I have no interest in shorting any of the indices in the United States. We just aren’t in an environment where that makes sense. That doesn’t necessarily mean that I want to go in and risk half of my account on buying any of them either. I think it’s just got more of a slight upward tilt to it as far as risk appetite is concerned.

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