NASDAQ Index, SP500, Dow Jones Forecasts – SP500 Pulls Back As Traders Take Some Profits Off The Table

Key Insights

• SP500 is slowly moving towards the 4700 level amid profit-taking. 
• NASDAQ is mostly flat in quiet trading. 
• Dow Jones is losing ground as traders wait for additional catalysts. 

SP500

SP500 pulls back as traders continue to take profits near recent highs. Today, traders focused on PMI reports. Manufacturing PMI declined from 49.4 in November to 48.2 in December, compared to analyst consensus of 49.3. Services PMI improved from 50.8 to 51, while Composite PMI increased from 50.7 to 51.0. Numbers above 50 show expansion. The manufacturing sector remains under pressure, but the strength of the services sector provides material support to the economy. Today, traders also had a chance to take a look at Industrial Production report, which indicated that Industrial Production grew by 0.2% month-over-month in November. NY Empire State Manufacturing Index decreased from 9.1 in November to -14.5 in December. The pullback is broad, and most market segments are losing ground, which is not surprising after a strong rally.

From the technical point of view, SP500 faced resistance at 4730 – 4750 and is moving lower due to profit-taking. SP500 may gain additional downside momentum in case it settles below the 4700 level.

NASDAQ

NASDAQ is mostly flat as demand for tech stocks remains strong. Most likely, NASDAQ needs some time to stabilize near current levels as some traders want to take profits near recent highs.

The nearest support level for NASDAQ is located in the 16,400 – 16,500 range. A move below 16,400 will open the way to the test of the 50 MA at 16,221.

Dow Jones

Dow Jones is losing some ground as traders exit long positions ahead of the weekend. The pullback is broad, and most Dow Jones components are moving lower in today’s trading session.

In case Dow Jones declines below the support at 36,900 – 37,000, it will head towards the next support level at 36,350 – 36,500.

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