S&P 500, Nasdaq & Dow Technical Price Outlook: Weekly Trade Levels
- S&P 500, Nasdaq & Dow technical trade level update – Weekly Charts
- SPX500 plunge testing key support zone near 3924
- Nasdaq held above confluent support at 11520/768
- Dow sell-off approaching key support at 30812
Stocks have been in free-fall since breaking multi-year uptrend support early in the month and while the broader outlook remains tilted to the downside, the sell-off is now approaching areas of interest for possible near-term support in the week ahead. These are the targets and invalidation levels that matter on the S&P 500 (SPX500), Nasdaq (NDX) and the Dow Jones Industrial Average (US30) weekly technical price charts. Review my latest Strategy Webinar for an in-depth breakdown of these technical stock setups and much more.
S&P 500 Price Chart – SPX500 Weekly
Technical Outlook: In last month’s S&P500 Technical Outlook we noted that SPX500 had, “turned from key technical resistance three weeks ago with the pullback now searching for a test of longer-term, uptrend support.” That slope broke the following week with the decline taking another 9% drop into confluence support here at the 100% extension of the yearly decline at 3924- looking for possible inflection here.
A break / close below is needed to keep the immediate short-bias viable towards the 38.2% Fibonacci retracement of the 2019 rally at 3812 and the objective 2021 yearly open at 3734– an area of interest for possible downside exhaustion IF reached. Initial resistance now eyed with the May open at 4140 backed by 4341. Bearishinvalidation now lowered to the 52-week moving average at ~4431.
Bottom line: The S&P 500 is poised to mark a seventh consecutive weekly decline with price now challenging confluent downtrend support- risk for a bear-market bounce here. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops- rallies should be capped by 4341 IF price is indeed heading lower on this stretch with a close below 3924 needed to keep the focus on objectives into the lower parallel near ~3800. Review my latest S&P 500 Near-term Technical Outlook for a closer look at the near-term SPX500 technical trade levels.
S&P 500 Trader Sentiment – SPX500 Price Chart
- A summary of IG Client Sentiment shows traders are net-long the S&P 500- the ratio stands at +2.42 (70.72% of traders are long) – typically a bearishreading
- Long positions are1.83% higher than yesterday and 8.58% higher from last week
- Short positions are 4.60% lower than yesterday and 2.79% higher from last week
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests US 500 prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current positioning and recent changes gives us a stronger US 500-bearish contrarian trading bias from a sentiment standpoint.
Nasdaq 100 Price Chart – NDX Weekly
Notes: The seven-week decline takes the Nasdaq into a key technical confluence at 11520/768– a region defined by the 100% extension of the yearly decline and the 50% retracement of the 2020 advance. Looking for possible price inflection here with a break / weekly close below needed to keep the immediate decline viable towards the 61.8% retracement at 10589. Initial resistance now at the 2021 low-week close (12668) with bearish invalidation now lowered to the April high-week close / upper parallel at 13860.
Bottom line: Nasdaq is testing confluent downtrend support for the second consecutive week. From a trading standpoint, a good zone to reduce portions of short-exposure / lower protective stops- rallies should be capped by 13000 IF price is heading lower on this stretch with a break from here keeping the focus on Fibonacci support at 10589.
Dow Jones Industrial Average Price Chart – US30 Weekly
Notes: The Dow may be playing catch-up here with the index down more than 16% off the record highs. The decline is approaching confluent downtrend support at the 100% extension near 30812– looking for a reaction in price there IF reached with a break / weekly close below needed to keep the short-bias viable towards the 38.2% retracement / 2021 lows at 29794/856. Initial resistance now at the 75% parallel / March close-lows at 32944 with bearish invalidation lowered to the December low at 34006.
Bottom Line: We’re looking for a reaction on a drop into downtrend support at 30812 for guidance here. From a trading standpoint, look to reduce short-exposure on stretch towards confluent support- rallies should be capped by 32944 IF price is heading lower with a break below the keeping the focus on 29794.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
Active Weekly Technical Setups
-Written by Michael Boutros, Technical Strategist with DailyFX
Follow Michael on Twitter @MBForex