SP 500 & NAS100 Price Forecast: Both Indices Face Key Resistance
According to the latest report, both the NAS100 and SPX indices are approaching a key resistance level, and their respective rallies may be in question. The forecast also suggests that a series of earnings reports scheduled to be released after the market closes could potentially push both the US indices beyond their current resistance levels.
The latest analysis from IG Client Sentiment shows that retail traders are currently net-short on the SPX, with 59% of traders holding short positions. This indicates a bearish stance on the index. To learn more about price action, chart patterns, and moving averages, you can check out the DailyFX Education Section.
Furthermore, there have been significant rallies in US indices, with the SPX up around 7% and the NAS100 up approximately 9.2% before a minor slowdown. Investors are closely monitoring the US Federal Reserve’s stance on potential rate hikes and cuts in 2024. The recent rally relied on the assumption that the Fed was done with rate hikes. However, the recent hike by the Reserve Bank of Australia and hawkish comments from Fed policymakers have brought uncertainty back into the market.
Fed Chair Powell was cautious in his comments about monetary policy, but the focus will continue on any hints the Fed provides on its policy direction. Investors believe that if interest rates have indeed peaked, there could be further upside for the S&P 500. As for individual stocks, valuations are relatively low outside of Mega Cap tech stocks, which could potentially lead to further upside for the rest of Q4.
Additionally, there are a lot of earnings announcements scheduled after the market closes today. Companies like Walt Disney (DIS), Virgin Galactic (SPCE), AMC Entertainment (AMC), and Marathon Digital Holdings (MARA) will be reporting their earnings. Traders are advised to keep an eye on any movements in after-hours trading heading into the US market open.
There are also some significant technical outlooks for the NASDAQ 100 and the S&P 500 indices. The recent rise has initiated a channel breakout in the NASDAQ 100, testing a key resistance area. For the S&P 500, it has followed a similar pattern, breaking above the inner trendline and now facing a resistance level. Further analysis of support and resistance levels is available in the charts provided in the report. The prevailing sentiment among traders is also a significant factor that plays into the market performance.
There is much anticipation in the market for potential rate hikes and its impact on the US indices. The latest rally might be at risk given the renewed uncertainty narrative surrounding the Fed’s policy stance. Investors are keen on understanding the earnings results from the big names and Fed events to gauge the future direction of the market. However, the recent cautious comments from Fed Chair Powell and upcoming earnings announcements from major companies are expected to have a significant impact on the market sentiment and the performance of the S&P 500 and NASDAQ 100.
