NASDAQ, Dow Jones and S&P 500 Weekly Forecast – US Indices Have a Tough Week

NASDAQ 100 Technical Analysis

The NASDAQ 100 initially did try to rally for the week but gave back gains above the $22,000 level. This could be laid firmly at the feet of Jerome Powell, who destroyed any confidence that the market might have had in the Federal Reserve during the press conference. To be as ridiculous as to suggest that it’s high prices and not inflation that is hurting Americans tells you just how feckless he’s become. At this point in time, the market seems to be voting with its feet, selling risk assets, as the Federal Reserve monetary policy now is about as clear as mud.

There are signs that they will stay tighter for longer next year, which is an argument that anybody who can read inflation metrics has been making, but it seems like Wall Street just got the message. This pullback is rather vicious and could continue, but the reality is it’s just about 5% back. It’s just the rate of change in the speed at which we’ve seen it that makes it so dangerous.

Dow Jones 30 Technical Analysis

The Dow Jones 30 had been falling to begin with and suffered another pretty significant pullback for the week of about another 4% or so, as we go plummeting towards the $41,750 level. If we can bounce from there, then it will be no harm, no foul by the time it’s all said and done, but again, you can thank Mr. Powell for this.

If the market were to break down below there, then the 50-week EMA comes into the picture, perhaps offering support as well. But you also have to keep in mind the time of year, and that’s part of what’s being played out here as well. With only degenerates and gamblers jumping into the market between Christmas and New Year’s, most people were taking profit anyway.

S&P 500 Technical Analysis

The S&P 500 has fallen pretty significantly for the week also, and as I record this is down about 4%, and again, it’s not that it’s down 4%, it’s that it’s down 4% in two and a half days. So, the question now will be whether or not the 5800 level holds out support. We’ll have to wait and see.

Next week could be very quiet because of Christmas being in the middle of it, or it could be a big mess because of a lack of liquidity. You just don’t know. That being said, 5,800 is an area I’m watching, followed by 5,600 for support.

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