Market Analytics and Considerations
Key Notes
- Strong selling began the session, but at about 1:30 PM ET, there was a rebound.
- The S&P 500 tested at least a significant area of resistance from previous support as stocks yesterday rose to important levels of resistance. Those supports immediately came back into action today, and tomorrow the Fed’s favored inflation index, PCE, will be a really significant driver.
- The Dow may be even more appealing for positive equities plays than the Nasdaq, as evidenced by this evening’s reaction to the important supports discussed in this week’s technical predictions. The Nasdaq has more negative attraction than the S&P.
Even though the year is coming to a close, stock market volatility has persisted. The S&P 500 made a sharp move to open the session this morning by making a straight drop from the crucial level of resistance that appeared on the graph overnight in the 3912–3928 range. This started out as opposition in late October until shifting to support throughout a few distinct occasions in November. When the S&P landed in the 3802-3810 zone that we had analyzed so over weekend, last week’s FOMC-driven sell-off had already broken through that band.
This support, which saw a doji printing on Tuesday and significant strength yesterday, at least momentarily stemmed the bleed. Entering into this morning (Friday), price having stalled at this crucial point of historical support, however the US GDP announcement completely caught everyone off guard when the Q3 Final number came in at 3.2% rather than the projected 2.9%. This shows that the US economy is still strong, which raises the probability that the FOMC will continuing to be aggressive, as Powell had previously warned would happen last week when sellers began to pick up the pace.
The S&P 500 has already had another significant bounce off support in the 3802-3810 area. This is a significant area since it has two Fibonacci areas near together and, maybe more significantly, because it has previously had an effect, helping to hold resistance in late October and early November prior to actually assisting in establishing support for the majority from last month.
NASDAQ
At this moment, price is still extremely close to the swing low points from 2022, which printed in a crucial area, and the tech-heavy index continues to hold a little more appeal for gloomy themes. The region between 10,501 through 10,751 served as a marker for the depths in both October and November. However, if merchants can wash up price through something like that, there’s a big point at the psychological level of $10,000, as well as the 61.8% Fibonacci retracement of the 2018–2021 big move, which, ironically enough, stretches the Fed’s most recent easing cycle. If sellers can make a stronger push, this turns into a significant test.
DOW
The Dow continues to be more appealing for bullish equity strategies than the Nasdaq and possibly even the S&P 500. The Dow fell to a significant area on the graph today, the same area which we had mentioned in the weekly prediction that was relevant on Tuesday. This swinging top from September coincides with a prediction of a bearish trendline. That was charted around 32,789, so it helped hold today’s depressions.
