Oct 23, 2022
VOT Research Desk
Market Insights, Considerations & Analytics
In the coming week, stocks are ready to continue their upward trend.
S&P 500, Dow, and Nasdaq 100 technical levels to keep an eye on this week
The S&P 500 hesitated for a significant portion of last week, but given that the dollar was strengthening and the bond market was collapsing, this was seen as a positive thing heading into the weekend.
Bonds appeared to be the sole voice in the recent macro theme reversal, with equities responding positively to a weak CPI data that was thought to be further depressing stocks, the dollar having peaked a few weeks prior. We may have the conditions for persistent strength in stocks now that bonds appear to have reached or be very close to a point of submission. Everything is up except for one dollar.
By itself, the inverse head-and-shoulders pattern that is forming around the June low signals that equities are about to rise. In order to move to the 3900/4000 zone, potentially higher, a breakout above the neckline and over 3806 should be possible (i.e. the 200-day MA currently over 4100).
A break below the 3647-level low would not change the outlook to the downside, but it would be cause to become cautious and consider maybe forming a stronger base before recovering. While things appear to be going well right now, this outlook is typically seen as corrective in nature in an ongoing bad market, thus while the rally is seen as possibly leading to the next selling opportunity in the near future.
Predictive -TECHNICAL FOR NASDAQ
The downward channel that has been in place since the August high is currently being broken by the Nasdaq100. This leading index needs to break out at this point because the larger market demands it. If the leg up is to actually have legs, it is crucial that the market dears set the example. On the upside, keep an eye on 11660, followed by 12063, and the Friday low of 10962.
Nasdaq – daily Patterns
Predictive -TECHNICAL FOR DOW
The NDX has been the market leader, but as was mentioned above in relation to the Dow Jones, it will be crucial to see the Dow hand off to the tech-heavy dominant player. The other indices are still gazing ahead to levels that the Dow is already clearing. The 200-day MA, currently at 32748 and declining, may come into play at some point in the upcoming weeks if the S&P and Nasdaq get up steam. Caution is advised if the price breaks below the 30206 low from last Friday.
Exponential – Weekly Moving Averages
Name |
MA5 |
MA10 |
MA20 |
MA50 |
MA100 |
MA200 |
Dow Jones |
30295.95 |
30543.77 |
31369.37 |
32409.71 |
32129.46 |
29969.43 |
S&P 50o |
3715.45 |
3775.55 |
3911.70 |
4069.31 |
4005.94 |
3676.88 |
Nasdaq100 |
10835.49 |
11090.70 |
11612.62 |
12462.89 |
12451.55 |
11337.02 |