S&P 500, Nasdaq 100, Dow Jones Technical Outlook Remains Positive

[MongiIG]

U.S. INDICES TECHNICAL OUTLOOK:

• S&P 500 posting a higher low so far, needs to hold
• Nasdaq 100 leading the way only marginally, but still a positive
• Dow is bullish above the weekly low at 30331

 

S&P 500, NASDAQ 100, DOW JONES TECHNICAL OUTLOOK REMAINS POSITIVE

The market is still poised to continue to recover in the days/weeks ahead as a higher low looks to cement itself this week. The S&P 500 is still following the recovery course plotted not too long ago coming out of an RST pattern.

To recap, an RST pattern, or Reverse Symmetrical Triangle, is often a reversal pattern that is marked by increased volatility/indecision. One of the critical components of the pattern is the first pullback becoming only that, whereby a higher low forms that leads to a short-term higher-high.

Last week’s low was tested emphatically and held with a major reversal day occurring. This helps validate the higher-low scenario. It will be important for the low in the ES contract at 3741.25 to hold if a recovery scenario is to continue to unfold.

On the top-side, 3950 becomes the first big level to hurdle. A failure to do-so may mean we are seeing a truncated bounce within the context of a broader downtrend. A higher high, however, keeps the RST in play towards slope resistance currently around 4050. There appears to be potential for a larger rebound up to around 4200 if momentum can pick up.

 

Jul 7, 2022 | DailyFX
Paul Robinson, Strategist