NASDAQ Index, SP 500 and Dow Jones Forecasts – US Indices Drop Early on Thursday

NASDAQ Technical Analysis

The NASDAQ 100 has pulled back just a bit during the early hours on Thursday, but at this point in time, it certainly looks as if we are going to have to determine whether or not there is support underneath. We are starting to at least try to fight back, but this is a market that during the previous session was knocking on the door of breaking down to an all-time high. Because of this, I suspect you have a situation where traders continue to look at this through the prism of a market that is probably going to continue to be very noisy.

And therefore, a little bit of a pullback would make a certain amount of sense, with the 21,600 level being an area of fair support, anything below there then really opens up a move to the downside. But I think even then, your downside’s probably somewhat limited to the 20,900 level with the 50-day EMA reaching that level. On the other hand, if we could break to a fresh new high, that would obviously be very bullish and it could send this market into the next leg higher, but we are forming a little bit of a rising wedge, suggesting that we are in fact getting a little bit exhausted, which would make sense, considering that the market has been basically schizophrenic this year.

Dow Jones 30 Technical Analysis

In the Dow Jones 30, it looks like we are going to continue to see a lot of problems. The 43,000 level has offered a massive resistance barrier. And I do think that we will probably pull back a bit, but I also think this is more likely than not going to be a good sign. If we can break above the shooting star, from the once hopeful looking Wednesday session, then it opens up a move to 43,500. The 50 day EMA is approaching the 42,000 level and rising. So, I think that could be your short-term course. I’m looking for a drop here and a V pattern to start trading once momentum goes to the upside.

S&P 500 Technical Analysis

The S&P 500 looks as if it is going to try to break down a bit as well, as we are right around the 6,000 level. And I think ultimately you have to look at this as a situation that I do believe is going to offer a buying opportunity fairly soon, but it’s a little early to get overly aggressive here. I think the best thing you can probably do is just let the market pull back, perhaps bounce and form a little bit of a V-shaped pattern that you can trade off of.

The 5,800 level below, I believe, is going to end up being on the longer-term floor if we do break down. The S&P 500 sees the 6,130 level above as a major barrier to overcome. If we can break above there, then obviously we can kick off the next layer higher, but really at this point, I think most of the indices just look a little bit stretched.

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