Jump to content

Dow Jones, S&P 500, Nasdaq 100 Technical Outlook Leading into 2022

Recommended Posts


  • Dow Jones upward momentum keeps slowing, but broader trend bullish
  • S&P 500 futures facing potential bearish Double Top chart formation
  • Nasdaq 100 may have more room lower before facing key support levels
Watch these stocks for a Nasdaq 100 bounce | Seeking Alpha


Even though the Dow Jones remains in a broader uptrend since March 2020, prices remain close to levels last seen in May of this year. Indeed, the index’s uptrend this year has been progressively slowing. The latest bout of market volatility followed the last Federal Reserve interest rate decision of this year, where the central bank offered a notable hawkish pivot to its outlook.

The latest price action in the Dow left it rejecting the 35807 – 36098 resistance zone, closing under the 50-day Simple Moving Average and the 78.6% Fibonacci extension at 35461. This leaves Dow futures facing the downside heading into the final few weeks of the year. Still, prices remain above the longer-term 200-day Simple Moving Average, which is maintaining the broader upside focus.

In the event prices weaken ahead and close under the 200-day line, follow-through will be key. To that end, keep a close eye on the 3383 – 33623 support zone. The latter has been in play since July. Uptrend resumption entails a pass above 36446. Do keep an eye on RSI. Negative divergence could emerge, showing fading upside momentum, undermining progress higher.

Dow Jones, S&P 500, Nasdaq 100 Technical Outlook Leading into 2022

Chart Created in TradingView


S&P 500 futures once again rejected the 4740 – 4711 resistance zone this past week. This range has been keeping upside progress at bay since late October. Negative RSI divergence has also been persistent, hinting at a turn lower. This could be the next move for the S&P 500, especially with a bearish Double Top chart formation brewing.

Still, follow-through is key. The neckline of the Double Top seems to be the 4492 – 4549 support zone. A breakout under this range could make the chart formation active, hinting at further downside losses. In such an outcome, the 200-day SMA will likely come into focus. This could still maintain the broad upward focus. Resuming the uptrend places the focus on the 123.6% Fibonacci extension at 4903.


Dow Jones, S&P 500, Nasdaq 100 Technical Outlook Leading into 2022

Chart Created in TradingView


Nasdaq 100 futures have also been quite wobbly as of late, with prices still below the all-time high of 16767 set in late November. However, a rising trendline from September 2020 continues to maintain the dominant uptrend – red lines on the chart below. Even beyond the trendline is the 200-day SMA. This hints that there may be more room left to the downside before prominent technical levels come into play.

Immediate support seems to be the 15538 – 15708 inflection zone, where taking it out exposes the trendline. To the upside, immediate resistance is the 16448 inflection point. This is a price that stands in the way of the Nasdaq retesting the all-time peak. Extending the uptrend exposes the 100% Fibonacci extension at 17161.

Dow Jones, S&P 500, Nasdaq 100 Technical Outlook Leading into 2022

Chart Created in TradingView


Written by Daniel Dubrovsky, Strategist for DailyFX.com

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Posts

    • Sainsburys full year earnings and Unilever’s first quarter trading update both say the same thing, UK consumers are in for higher prices. The war in Ukraine, supply chain issues and the effects of ongoing Covid all to blame.      
    • US Dollar (DXY) Daily Price and Analysis US Q1 GDP may stall the greenback’s advance. A 20-year high nears for the US dollar. The multi-month US dollar rally continues with the greenback printing a fresh high today ahead of the first look at US Q1 GDP at 12.30 GMT. The US dollar basket (DXY) has been boosted by renewed weakness in the Euro and the Japanese Yen, as investors move from lower-yielding to higher-yielding currencies, while safe-haven flows continue to benefit the greenback. The US growth release later in the session is expected to show a sharp slowdown from the robust Q4 figure of 6.9%. The markets are currently pricing in growth of just 1% for the first three months of this year, with the slowdown mainly due to a reduction in inventory accrual over the quarter. This release is unlikely to move the greenback, unless there is a large miss or beat, as the Fed believe that 2022 US growth will be robust enough to let them tighten monetary policy sharply without damaging the economy. The latest US Core PCE data – the Fed’s preferred inflation reading – is released on Friday and this may have more effect on the US dollar than today’s GDP data. For all market moving economic data and events, see the DailyFX Calendar. The ongoing US dollar rally has been aided by weakness across a range of G7 currencies including the Euro, the Japanese Yen, and the British Pound. The Euro continues to battle with lowly growth expectations, exacerbated by energy concerns, the British Pound is mired by weak economic data, while the Japanese Yen is in freefall as the BoJ continues with its ultra-loose monetary policy.   The US dollar continues to press higher and looks set to break above 103.96, the March 2020 high. Above here the US dollar would be back at levels last seen nearly two decades ago. The March resistance will likely hold in the short-term, especially with month-end portfolio rebalancing at the end of the week, but US dollar strength is set to continue in the months ahead. USDOLLAR (DXY) WEEKLY PRICE CHART – APRIL 28, 2022 {{THE_FUNDAMENTALS_OF_BREAKOUT_TRADING}} What is your view on the US Dollar – bullish or bearish?   Apr 28, 2022 | DailyFX Nick Cawley, Strategist
    • While Tesla has nothing directly to do with Elon Musk buying Twitter - TSLA stock closed down 12% on news that Musk may have to sell stock and use other holdings to stand against the loan to finalise the purchase of the social media giant.        
  • Create New...