S&P 500, Nasdaq, Dow Jones Technical Forecast: October Ranges

US Inventory Indices Technical Forecast: Weekly Commerce Ranges

• SPX500 assist 3419-3501, 3142-3219- resistance 3664, 3734, 3906
• Nasdaq assist 10589, 9206-9446 – resistance 11119, 11861, 12668
• Dow assist 28323, 26982-27583, 25371- resistance 29794, 30822, 32272

The inventory plunge has seen all three main indices plummet greater than 22% off the report highs with the S&P 500, Nasdaq and the Dow Jones Industrial Common breaking to contemporary yearly lows. Whereas the broader outlook stays weighted to the draw back, the declines are actually approaching downtrend assist and we’re in search of a response simply decrease for steerage. These are the targets and invalidation ranges that matter on the S&P 500 (SPX500), Nasdaq (NDX) and the Dow Jones Industrial Common (US30) weekly technical charts. Evaluate my newest Technique Webinar for an in-depth breakdown of those technical inventory setups and way more.

S&P 500 Worth Chart – SPX500 Weekly

Chart Ready by Michael Boutros, Technical Strategist; SPX500 on Tradingview

Notes: In final month’s S&P 500 Weekly Technical Outlook I famous {that a} rebound off near-term confluent assist had shifted the main focus greater within the SPX and to be looking out for topside exhaustion, “forward of 4179 IF value is certainly heading decrease right here with a break threatening one other run towards the yearly lows.” The index registered a excessive at 4145 the next week earlier than posting an out of doors weekly-reversal with the next decline taking out the yearly lows.

Key weekly assist stays unchanged at 3419-3501– a area outlined by the August 2019 high-week shut and the 50% retracement of the 2020 advance. Observe that fundamental channel assist converges on this threshold over the subsequent few weeks – look for a bigger response there IF reached with a weekly-close under threatening a plunge in the direction of extra important assist on the confluence of the 100% extension of the yearly decline, the 61.8% Fibonacci retracement of 2020 rally and the item 2020 yearly open at 3142-3219.

Preliminary resistance eyed on the 2021 low at 3664 backed carefully by the 2021 yearly open at 3734. Broader bearish invalidation now lowered to the Might low-week shut at 3906– a breach / weekly shut above could be wanted to counsel a extra important low is in place.

Backside line: The S&P 500 breakdown to contemporary yearly lows stays susceptible to additional losses within the days forward. From a buying and selling standpoint, rallies ought to be restricted to the August trendline IF value is heading decrease on this stretch with a break from right here exposing 3419-3501. I’ll publish an up to date S&P 500 Brief-term Technical Outlook as soon as we get additional readability on the near-term SPX500 technical commerce ranges.

S&P 500 Dealer Sentiment – SPX500 Worth Chart

• A abstract of IG Consumer Sentiment exhibits merchants are net-long the S&P 500- the ratio stands at +1.82 (64.54% of merchants are lengthy) – usually a bearish studying
• Lengthy positions are 5.18% greater than yesterday and 5.59% greater from final week
• Brief positions are 5.56% decrease than yesterday and seven.97% decrease from final week
• We usually take a contrarian view to crowd sentiment, and the very fact merchants are net-long suggests SPX500 costs might proceed to fall. Merchants are additional net-long than yesterday and final week, and the mix of present positioning and up to date adjustments provides us a stronger S&P 500-bearish contrarian buying and selling bias from a sentiment standpoint.

Nasdaq 100 Worth Chart – NDX Weekly

Chart Ready by Michael Boutros, Technical Strategist; NDX on Tradingview

Notes: Nasdaq has plunged greater than 21.7% off the August highs with a break of the yearly lows now approaching the subsequent main assist zone on the 61.8% retracement of the 2020 advance at 10589– in search of a response / attainable inflection right here. A break / weekly-close under this threshold would threaten a a lot steeper decline within the index with such a situation exposing the 1.618% extension / February 2020 high-week shut at 9206-9446. Preliminary resistance now again on the September 2020 low-week shut at 11119 backed by the September high-week reversal shut at 11861. Broader bearish invalidation now lowered to the 2021 low-week shut at 12668.

Backside line: Nasdaq is approaching Fibonacci assist simply decrease and we’re in search of a response on a attainable stretch in the direction of 10589. From at buying and selling standpoint, rallies ought to be restricted by 11861 IF value is heading decrease with a break right here risking the subsequent leg of the broader downtrend.

Dow Jones Industrial Common Worth Chart – US30 Weekly

Chart Ready by Michael Boutros, Technical Strategist; US30 on Tradingview

Notes: The Dow Jones Industrial Common broke under Fibonacci assist final month with the index now approaching the decrease bounds of the yearly downtrend (channel assist). Weekly assist relaxation with the 2020 uncovered hole at 28323 backed by 26982-27583– a area outlined by the 50% retracement of the 2020 advance and the 100% extension of decline off the yearly / report excessive. Observe that losses past this threshold may gas one other bout of accelerated losses with such a situation exposing the 61.8% retracement at 25371. Preliminary weekly resistance stands at 29791 backed by the September high-week reversal shut at 30822. Broader bearish invalidation now lowered to the target February low at 32272.

Backside Line: The Dow sell-off is now approaching yearly downtrend support- in search of a response simply decrease. From at buying and selling standpoint, rallies ought to be restricted to 30822 IF value is heading decrease on this stretch with a break decrease maintaining the concentrate on subsequent aims into channel assist.

For an entire breakdown of Michael’s buying and selling technique, evaluation his Foundations of Technical Evaluation sequence on Constructing a Buying and selling Technique

Energetic Weekly Technical Setups

• US Greenback Index (DXY)
• British Pound (GBP/USD)
• Canadian Greenback (USD/CAD)
• Euro (EUR/USD)
• Gold (XAU/USD)
• Crude Oil (WTI)
• Australian Greenback (AUD/USD)
• Japanese Yen (USD/JPY)

-Written by Michael Boutros, Technical Strategist with DailyFX

Observe Michael on Twitter @MBForex