S&P 500, Nasdaq 100 and Dow rally ahead of US non-farm payrolls
Outlook on S&P 500, Nasdaq 100 and Dow ahead of Friday’s US non-farm payrolls.
S&P 500 rallies to critical technical resistance post Fed rate hike
The S&P 500 accelerated to the upside and on Thursday rallied above its September and December highs at 4,139 to 4,155 - which represent key resistance – but then slid back and closed marginally above this area as Apple sales dropped by 5% in their largest quarterly decline since 2016.
If the S&P 500 were to have another daily close above 4,155 this Friday and by definition then a weekly close, especially after the US non-farm payroll data, the August peak at 4,325 would be next in line. En route lies the late August high at 4,215.
Minor support below 4,139 can be found between the early December and January highs at 4,101 to 4,094, below which the breached one-year downtrend line can now be seen at 4,037.
While Tuesday’s low at 3,994 isn’t being slipped through, the 2023 uptrend remains intact.
Nasdaq 100 rallies despite gloomy outlook by US tech giants
In case of the Nasdaq 100, a bottom has already been confirmed by Wednesday’s close above the November and December highs at 12,084 to 12,258, with the September peak at 12,902 nearly having been reached before disappointing results by tech giants such as Apple, Amazon and Alphabet drove the index lower.
With all three companies offering a gloomy outlook in their quarterly results, a further retracement lower may be seen on Friday. Having said that, the technical bullish view will remain valid as long as investors continue to expect that the Federal Reserve’s (Fed) tightening cycle may be nearing its peak and while Tuesday’s low at 11,817 isn’t being slipped through or a clear technical bearish reversal signal is being given by the index.
A rise above the 12,902 September high would put the August peak at 13,722 on the map.
Dow continues to be this year’s US underperformer
Only the Dow Jones Industrial Average is underperforming and is finding it difficult to advance, having on Wednesday failed around its January high.
The index continues to range trade within its 34,941 to 32,474 December extremes but does remain short-term bullish while this week’s low and the October-to-February uptrend line at 33,512 to 33,490 underpin on a daily chart closing basis.
Having said that, a rise and daily chart close above the January and February highs at 34,346 to 34,348 needs to be seen, for the December peak at 34,941 to be back in the frame.
Failure at this week’s low at 33,490 would have short-term negative implications.
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