S&P 500/Dow Jones/Nasdaq 100 Technical Highlights:
- S&P 500 trading around February low, FOMC today
- Dow Jones testing several lows from early in the year
- Nasdaq 100 holding up a bit better, trading around t-line
Traders are reacting to increased volatility, see how on the IG Client Sentiment page.
S&P 500 trading around February low, FOMC today
The past couple of sessions the S&P 500 has been trading around the February low (year low), an important spot for the market to try and mount a rally from. Today’s FOMC meeting makes for an interesting alignment with a potential catalyst, as the market looks for the Fed to turn dovish.
On technical merits alone, the market is ‘due’ for a bounce as the ~10% decline off the monthly high has the market a bit oversold. If we don’t see further selling and in fact get a lift today, then a corrective bias will be in order. A bounce may not last long though as general trend/tone and resistance levels ahead may quickly put a lid an advance from 2600 up to 2630.
In any event, being a strong seller in the near-term isn’t without significant risks as oversold and significant support give the market a shot at a rebound. Looking out more broadly, expectations are for 2019 to be a rough year for stocks. For more details, we’ll be soon releasing our Q1 equities forecast.
S&P 500 Daily Chart (Trading around Feb low)
Dow Jones testing several lows from early in the year
The Dow has several lows from early in the year clustered together in the 23530/360-area. This makes for a strong floor, increasing the likelihood of seeing a bounce develop. But just as the case is with the S&P it may not last long, as resistance lies a few hundred points higher via recent lows and broken trend-lines. A break through the Feb low at 23360 will have the Dow searching for support levels.
Dow Daily Chart (Several lows as support)
Nasdaq 100 holding up a bit better, trading around t-line
The Nasdaq 100 is still holding above its November low and thus a bit above the yearly lows. With the general trend down, a bounce from here looks capable at best to reach the trend-line off the record high. A break lower will have the support zone from 6322 down to the yearly low at 6164, while the S&P and Dow will in all likelihood be trading below their respective 2018 lows.
Nasdaq 100 Daily Chart (Holding above support)
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