Bear Market Lows Coming into Focus

U.S. Indices Technical Outlook:

• S&P 500 heading towards the early summer rally levels
• Nasdaq 100 continues to be the focal point as the leader
• Dow Jones levels and lines to watch in days ahead

S&P 500, Dow Jones, Nasdaq 100 Outlook: Bear Market Lows Coming into Focus

The market is on its backfoot, with it breaking down to the worst levels seen since the early days of the summer rally. Looking at the S&P 500 the next level of meaningful support clocks in around the low 3700s. There is a level from May around 3811, but not viewed as meaningful as the levels just beneath it.

And of course even more meaningful is the 3636 June low. We doesn’t seem as though we will see that on this run lower without a bounce first, but it is anticipated that it will get met and exceeded in the weeks ahead.

The thinking is that the market will sell off into at least next month before finding a meaningful low. A spike in fear / capitulation looks necessary for the market to find a tradeable low.

S&P 500 Daily Chart

S&P 500 Chart by TradingView

The Nasdaq 100 is looking at the 11492/321 area as the next point of support, with the summer low at 11037 as the biggest level to watch. The low at 11927, if fully exceeded soon, will become a point of potential resistance on any bounce higher.

Nasdaq 100 Daily Chart

Nasdaq 100 Chart by TradingView

TheDow Joneshas support down around 30149, followed by the June low at 29653. The 31048 level will be viewed as a meaningful spot to watch as resistance on any kind of bounce. The thinking is obviously the same as the above indices, new bear market lows this fall.

Dow Jones Daily Chart

Dow Jones Chart by TradingView

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—Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX