(MENAFN- DailyFX) S & P 500/Dow Jones Technical Highlights: S & P 500 is declining out of wedge, still has room to fall Dow Jones reversal-day was impressive but may not last Check out the fundamental and technical forecast for stocks as they rise towards record highs in the Q2 Equity Markets Forecast.
S & P 500 is declining out of wedge, still has room to fall So far this week the S & P 500 has made good on declining from the rising wedge we've been focusing on the past couple of weeks. Yesterday's turnabout day, though, does bring into notion the possibility of a pause in the decline at the least, possibly a rally.
However, if yesterday afternoon's rally is not extended quickly then the risk becomes skewed towards strength being nothing more than an intra-day bounce; even a rally from here if not strong might still turn out to be nothing more than a short-lived bounce as the forces of the rising wedge are still present and downside projected targets have yet to be met.
A drop below 2836 will significantly increase the odds that the 200-day at 2775 or worse will be reached. A hold above yesterday's low will at the least keep the market neutral if not turn it bullish.
Traders are generally short the S & P 500, find out on the IG Client Sentiment page what this could be for prices moving forward.
S & P 500 Daily Chart (Rising wedge potential still unfulfilled) Dow Jones reversal-day was impressive but may not last The Dow Jones posted an impressive reversal candlestick ('pin bar') yesterday just above the 200-day MA. If the S & P goes on to press lower towards its own 200-day then the Dow is likely to fall much further than the 200-day MA towards the 25208 low. But just as is the case with the S & P, hold onto the low and the outlook is neutral to potentially bullish.
Dow Jones Daily Chart (reversal-day, but can it hold?) To learn more about U.S. indices, check out 'The Difference between Dow, Nasdaq, and S & P 500: Major Facts & Opportunities.' You can join me every Wednesday at 10 GMT for live analysis on equity indices and commodities, and for the remaining roster of live events, check out the webinar calendar .
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
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