NASDAQ, Dow Jones and S&P 500 Forecasts – US Indices Looking to Extend Relief Rally

The US stock market continues to see a lot of volatility, as traders are trying to sort out where risk appetite is heading.

NASDAQ 100

The NASDAQ 100 pulled back a little bit in pre-market trading but remains somewhat well supported and therefore I think we’ve got a situation where a lot of traders are going to be looking at this as a potential buy on the dip scenario. There is a lot of hope out there that the ceasefire that is coming together in the Middle East could bring the hostilities to an end, but keep in mind that the 25,000 level is an area that a lot of people will be watching closely.

NASDAQ 100 daily chart. Source: TradingView

Wednesday’s High Is the Bullish Trigger

If we can break above the highs of the Wednesday session, I think that’s an extraordinarily bullish sign, and I do believe at that point we probably have a scenario where traders will be looking to take advantage of any momentum. Otherwise, a pullback to the 50-day EMA makes a certain amount of sense.

Dow Jones 30

The Dow Jones 30 is struggling a bit at the 48,000 level, an area that I think will continue to be important as it’s a large round psychologically significant figure and an area that has offered a bit of support and resistance previously. I do think this is a market that could favor the upside, but we need some good news and with the peace talks going on in Islamabad on Friday, it is a market that could be jolted in either direction. A move above 48,000 would be bullish obviously.

Dow Jones 30 daily chart. Source: TradingView

S&P 500

The S&P 500 finds itself a little bit soft in pre-market trading as we are approaching the 6,800 level. If we can break above the highs of the Wednesday session, I think that does send the S&P 500 looking for the 6,900 level followed by 7,000.

S&P 500 daily chart. Source: TradingView

Ceasefire Could Open the Path Back to 7,000

If the war is over soon or some type of lasting ceasefire can be agreed to, then I by default would expect the S&P 500 to get back to the 7,000 level, an area that it has been targeting and trying to break through quite a bit before the attacks on Iran. Short-term pullbacks I think have support at the 50-day EMA.