Little Bearish Price Action at Resistance


S&P 500/Dow Jones/Nasdaq 100 Technical Highlights:

  • S&P 500 seeing little selling pressure at big price zone
  • Dow Jones may soon trade to record highs
  • Nasdaq 100 rising through small levels of resistance

Check out the forecasts for Global Stock Indices and other markets on the Trading Guides page.

S&P 500 seeing little selling pressure at big price zone

Last week, the S&P 500 ran into resistance in the 2800/17-area, a zone penciled in as likely to be problematic for the market. While it has thus far kept a lid on higher prices it has failed to dent the market as initially anticipated.

It still could, but if not soon then a run to the old record high or better may be in the works. The upward sloping channel since late January continues to be a guide for both sides of the tape. Even though price is at resistance a turn down and break of the underside parallel will be needed before shorts turn more attractive, while longs can continue to use the bottom of the channel as means for assessing downside risk.

Stocks are rallying, but will it last in the long-term? Find out where our analysts see stocks headed in the Global Equities Forecast.

S&P 500 Daily Chart (2800/17/channel)

S&P 500 daily chart, 2800/17/channel

Dow Jones may soon trade to record highs

The Dow is treading water around the 26k-mark, and like the S&P it is enveloped in a solid upward sloping channel. If we are to see U.S. markets break to record highs it is likely that the Dow would make a new record first. The focus on this end remains the channel – stay within then neutral to bullish, break below and risk of meaningful decline rises.

Dow Daily Chart (nestled in upward channel)

Dow daily chart, nestled in upward channel

Nasdaq 100 rising through small levels of resistance

The Nasdaq 100 doesn’t have quite the clean upward price structure prevalent in the other two major indices. A move higher has minor resistance at 7200, 7310, followed by the underside of the June 2016 trend-line. A swift break below last week’s low at 7045 and the 200-day MA, along with a channel-break in the Dow and S&P 500 will be reason to look for weakness.

Nasdaq 100 Daily Chart (minor resistance)

Nasdaq 100 daily chart, minor resistance

To learn more about U.S. indices, check out “The Difference between Dow, Nasdaq, and S&P 500: Major Facts & Opportunities.” You can join me every Wednesday at 10 GMT for live analysis on equity indices and commodities, and for the remaining roster of live events, check out the webinar calendar.

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—Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX


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