NASDAQ Index, S&P 500 and Dow Jones Forecasts – US Indices Choppy in Premarket Trading Ahead of FOMC

NASDAQ 100 Technical Analysis

The NASDAQ 100 is slightly negative during the trading session in the early hours of Wednesday as we are heading toward the FOMC decision later in the day. That being said, it is a market that has been extraordinarily bullish. And I do think that they’re probably going to do a little bit of profit taking along the way. That does make perfect sense.

After all, this is a market that’s gone straight up in the air for two weeks. That doesn’t mean that I’m looking to short this market. I’m just looking at any knee-jerk reaction to the downside as a potential buying opportunity.

Dow Jones 30 Technical Analysis

The Dow Jones 30 is relatively flat during the early part of the Wednesday session, which of course is waiting on the FOMC interest rate decision, the statement, the press conference and everything else that’s coming later. A lot of traders out there are looking for three interest rate cuts between now and the end of the year. And if there’s anything that throws cold water on that in the press conference or maybe just the tone of the statement, that could cause a little bit of negativity here.

At this point, we are still in the rising wedge that I’ve been talking about for about two weeks now. And if we were to break down below that uptrend line, I think at that point, we might go looking at the 45,000 level, which is a large, round, psychologically significant figure in an area that previously has been important.

S&P 500 Technical Analysis

The S&P 500 is very choppy and very tight range in the early part of the Wednesday session as well, as we are waiting for the FOMC interest rate decision. I suspect at this point any knee-jerk reaction to the downside probably gets bought into unless the Federal Reserve doesn’t cut rates. That probably would throw chaos into the markets. I don’t think that’s going to be the case. The question is whether or not they sound like they are going to continue to cut rates.

The 6500 level underneath is an area that I would expect to be a floor in the market, but we would have to drop about 110 points just to get there. And that’s a bit much in one day. Because of this, I’m looking for price action to show a bit of a V pattern after a plunge that I can start buying into. If we can break above the highs of the previous session on Tuesday after the meeting, then it’s just going to be a momentum drive higher. All things being equal, we’re still very bullish, I just recognize that there’s a lot of noise over the next 12 to 20 hours.

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