NASDAQ, Dow Jones and S&P 500 Forecast – US Indices Pull Back in Early Trading on Monday

NASDAQ 100 Technical Analysis

The NASDAQ 100 fell a bit during the course of the early hour trading on Monday, but really looking at this chart, I do think that there’s plenty of support underneath. You could make an argument for the 50 day EMA underneath offer in a bit of a trend line.

But I think also what you have to keep in mind is that we’re at the very end of the year and traders who bought the NASDAQ 100 several months ago are more likely than not going to be willing to take those profits, especially those who are managing money for others they need to show a return. The 21,000 level should offer support right along with the 50 day EMA, but even if it doesn’t, then maybe we reset down to 20,000. This is most certainly a buy on the dip market as things stand right now.

Dow Jones 30 Technical Analysis

The Dow Jones 30 has pulled back just a bit as well. But again, I think this is another situation where it’s probably more profit taking related than anything else. That being said, pay attention to those 10 year yields in America because they continue to climb, and that’s not good for stocks over the longer term, especially industrials, as they are highly sensitive to interest rates at times, because the more expensive it is to build out of your infrastructure and larger cap X type items, the more likely you are to see these big companies seize up a little bit. Nonetheless, I still think this is a buy on the dip scenario as well.

S&P 500 Technical Analysis

The S&P 500 plunges below the 50 day EMA pretty early during the session. But again, like the other indices, I do think this is a buy on the dip opportunity. I just don’t know whether or not it happens right away, or if it’s more or less a New Year’s kind of situation where maybe we need to get through a couple of trading sessions for people to start putting money to work, possibly even the jobs report in January, then we should continue the overall uptrend.

Quite frankly, right now foreigners are tossing money at the US stock markets as a way to get away from currency risk and of course, economic slowdowns in places like the European Union. I do think that is the theme going forward. So, it’s just a matter of letting the market bounce a bit and tell you it’s time to turn things back around to the upside. I have no interest whatsoever in shorting any of these indices.

For a look at all of today’s economic events, check out our economic calendar.