Jump to content

Dow Jones, Nasdaq 100, S&P 500 Forecast: The Relative Strength Play

Recommended Posts


  • S&P 500 continues to demonstrate impressive relative strength
  • Nasdaq 100 & Dow Jones also looking to make significant higher lowers
  • A bounce in risk looks near, with the U.S. leading the way
Dow Jones, Nasdaq 100, S&P 500 Forecast: The Relative Strength Play

Dow Jones, Nasdaq 100, S&P 500 Forecast: The Relative Strength Play

The S&P 500 continues to hold up well compared to other major stock markets that are more heavily impacted by the Russia/Ukraine situation. While Europe and Asia head to new depths during this crisis, U.S. stocks are demonstrating glaring relative strength. With the rest of the world getting into oversold territory, a bounce in risk appears near with the U.S. leading.

The DAX, CAC, FTSE, Nikkei and others have all been hammered in recent days, with price action turning panicky. A low here shortly (perhaps as soon as today), even if just an oversold bounce, should see the S&P 500 create a new near-term high above 4416 and move towards the 200-day moving average at 4466.

There lies a trend-line off the record high just below the long-term average. A rally into the 4425/4466 area will be an important test of the recent trend lower. We may see price stall and roll over at that juncture, but if developments turn more positive we may see initial resistance taken out in quick order.

A move below last week’s low at 4279 with momentum may mean that while the U.S. has been holding up relatively well, overall sentiment will get to even the strongest of markets and lead the S&P to a retest (or worse) of the Feb 24 low at 4114.



S&P 500 daily chart

S&P 500 Chart by TradingView

The Nasdaq 100 may not see the 200-day moving average even if the above outlined scenario plays out as it lies all the way up to 15101. To reach the 200-day soon will likely require some positivity on the headline front. Just an oversold bounce in risk isn’t seen as being enough of a catalyst. The first line to watch is the trend-line from January and then the most recent swing-high at 14342.


Nasdaq 100 daily chart

Nasdaq 100 Chart by TradingView

The Dow Jones is holding support around the 33150/300 area, a spot that extends back to last year. We may see this hold up as a higher low as soon as early this week. If the market can get into gear look for it to rally towards the trend-line off the Jan high and 200-day MA at 35022.


Dow Jones Daily Chart

Dow Jones Chart by TradingView

Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---Written by Paul Robinson, Market Analyst. DailyFX 7th March 2022

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...