NASDAQ 100 Technical Analysis

The NASDAQ 100 has rallied a little bit during the early hours on Friday as it looks like we are going to continue to try to grind to the upside. I suspect that we are looking at a potential move to the 20,500 level, but that doesn’t necessarily mean that it’s easy or that it happens quickly.

This area has been resistant a couple of times over the last couple of weeks, but more than anything else, what I see right now is just digestion of a significant amount of gains over the last two to three weeks. Given enough time, I do expect that we will break out to a fresh new high, and with liquidity measures coming from the Federal Reserve, I think Wall Street is looking at it through that prism as well.

Dow Jones 30 Technical Analysis

The Dow Jones 30 looks particularly interesting, as we had formed a hammer during the previous Thursday session, and now it looks like we are trying to break out to the upside. If and when we do, we should go looking to the 43,000 level. Even if we were to break down from here, I see plenty of support at 41,900, especially now that the 50-day EMA is there.

And of course, all you have to do is look back a couple of weeks and you can see that area has a lot of support in it. If we do break higher, then 43,000, of course, could be a target, but really, I think we go higher than that. The Dow Jones 30 has performed quite well as of late, and I think that continues to be the case.

S&P 500 Technical Analysis

The S&P 500 rallied ever so slightly during the early hours on Friday as well, although I think we are heading into more or less an area of consolidation and digestion more than anything else with a bit of an upward tilt. This doesn’t mean that you can’t be a buyer. It just means that you have to dampen your expectations a little bit.

Short-term pull banks continue to offer support, and I do think that the area right around 5,780 continues to be a short-term floor. If we were to break down below there, then you have to look at the 50-day EMA as a potential support level which is just now breaking the 5,700 level. Longer term, I think that the S&P 500 is going to do everything it can to get to the large round psychologically significant 6,000 level.