S&P 500; US Indexes Fundamental Daily Forecast – Dow Riding Apple Earnings to First Time Test of 22,000

U.S. equity indexes are expected to open higher on Wednesday, bolstered by blowout earnings from Apple, which surged nearly 6 percent in the pre-market session. The Dow and NASDAQ Composite are expected to benefit the most from the sharp rise in the tech giant.

The higher opening by the Dow is also expected to put it on course for its first test of 22,000. This is just a psychological number and should not be considered resistance. The market is currently being driven higher by momentum. If buyers continue to come in to support the market and can sustain the rally over 22,000 then this price will actually become support.

The only thing that bullish investors have to worry about is a higher-high, lower-close, technical chart pattern. This would clearly signal that the selling is greater than the buying at current price levels, but would not necessarily represent a change in trend.

If the Dow continues on its vertical path then the only way to alleviate some of the upside pressure and to attract more buyers will be to take it lower for a few days.

With the Dow at a new all-time high, investors are hoping the buying spree spreads to the S&P 500 and NASDAQ. These two indexes have struggled lately.

Traders have ignored the political problems in Washington and the geopolitical concerns over Russia and North Korea, and have primarily focused on earnings. There are some concerns over what catalyst will emerge to sustain the rally after the end of earnings season, however, it’s not a major issue yet.

In other news, ADP and Moody’s reported that the private sector of the economy added 178,000 jobs in July, this was slightly lower than the 183,000 estimate. Traders didn’t seem to be rattled by the news as they remain focused on earnings and Friday’s U.S. Non-Farm Payrolls report.