S&P 500 and NASDAQ 100 Forecast - 1 July 2016

S&P 500

Initially, the S&P 500 fell during the day on Thursday, but we found enough support to continue going higher. In fact, we crashed into the 2100 level, an area that I had marked on the chart previously. With this, I think we are starting to get a little bit overbought, so I think that pullbacks are likely. Nonetheless, I have no interest in selling this market because I believe that it’s only a matter of time before the buyers come back into the market. We could break above the 2100 level and continue to go higher, but at this point in time I am eyeballing a shooting star from last Thursday that seems to solidify the resistance. Markets can’t go in one direction forever, so it makes quite a bit of sense that we pullback from here.

SP 500

NASDAQ 100

The NASDAQ 100 initially fell during the course of the session on Thursday but turned right back around to form a fairly positive looking hammer. We broke through the 4400 level, and that of course is a bullish sign. Ultimately, I do think that we go higher but we might be a little bit overextended at this point in time so I’m actually looking for a short-term pullback to show signs of support that I can take advantage of as perceived “value.” A break of the top of the candle would also be bullish, but I think there’s a lot of noise just above so it’s very likely that a move directly higher from here would face quite a bit of choppiness.

I believe that the 4300 level below will end up being the “floor” in this market, and as a result it’s not until we break down below there that I would even remotely consider selling this market, even though I have quite a bit of noise underneath there that will make we have to think about that very seriously.

Nasdaq

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.