S&P 500, Dow Jones, Nasdaq 100 Technical Outlook for the Days Ahead

U.S. Indices Technical Outlook:

• S&P 500 heading for another test of the 200-day, trend-line off highs
• Nasdaq 100 breaking above a pair of minor swing highs suggest higher levels
• Dow has the summer rally high as the next significant point of resistance

S&P 500, Dow Jones, Nasdaq 100 Technical Outlook for the Days Ahead

Stocks continue to recovery, with its latest round of help coming from the better-than-expected CPI report on Thursday. The massive boost was impressive, but overall the broader outlook I have is that we are still in the early stages of a broad bear market.

In the near-term there looks to be more upside left in the rally. The next significant level of resistance to watch arrives via the 200-day moving average, currently at 4081 and falling. This could happen just as the dollar (DXY) tags its 200-day (10503 & rising) and price support. This would make for an interesting confluence of technical events between the two given the dollar’s importance these days.

Just beyond there a short distance lies the trend-line off the highs. It was confirmed as a meaningful line of resistance at the summer rally high. Furthermore there are a pair of swing-level around 4120.

Reaching up into resistance here shortly is seen to at least induce some type of market reaction, even if only a pullback that is erased in favor of more gains. Ideally, we see some type of volatile turnabout around resistance that provides signaling that the market will turn lower.

At that juncture, depending on how it unfolds, it could yet set another bear market rally high. A breakout above resistance will of course take that off the table for now, and would suggest we may see the rally hold up through year-end.

If price dips from current levels watch 3911 as support. A drop beneath there will bring into play a trend-line off the lows, another spot would-be longs could look at as a possible dip-trip opportunity.

S&P 500 Daily Chart

S&P 500 Chart by TradingView

The Nasdaq 100 was problematic for the broader market as the leading index continued to lag. With the breakout above 11681 it was able to hurdle important near-term resistance. This gives the NDX some room to work with on the top-side. A pullback into the 11681/11660 are could provide would-be longs with an opportunity. Continue to monitor the health of this important index for clues on how this leg up in the broader market will unfold.

Nasdaq 100 Daily Chart

Nasdaq 100 Chart by TradingView

TheDow Joneshas been leading in a big way, with its old school weightings performing well. Having this index as the leader, though, doesn’t necessarily bode well for the broader market, and in fact is viewed as a negative.

Looking to levels above, the summer high at 34289 should come into play here shortly. It may coincide with a run-in with the 200-day MA by the SPX, thus creating a confluence of indices hitting big levels, along with the DXY (dollar) hitting its 200-day.

Dow Jones Daily Chart

Dow Jones Chart by TradingView

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—Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX