S&P 500, Nasdaq, Dow Forecast: Stocks Erase Liberation Day Losses

Equities Technical Forecast: Weekly Trade Levels

Stocks stage massive recovery off yearly lows- rallies extend /close near highs on NFP beat
S&P 500, Nasdaq erase Liberation Day sell-off as bulls eye Fed interest rate decision
Battle lines drawn on the SPX, NDX, and DJI weekly technical charts

S&P 500 Price Chart – SPX500 Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; S&P 500 on TradingView

Technical Outlook: The S&P 500 plunged more than 21.8% off the yearly high with the index rebounding off technical support last month at the 2022 high-close / swing high at 4785-4820. On a close basis, the 2022 uptrend is preserved and SPX500 has now recovered the entire ‘Liberation Day’ decline in a four-week rally extending nearly 18.7% off the yearly low.

The advance closed above a key pivot zone on Friday at 5637/83- a region defined by the 61.8% retracement if the yearly range, the 1.382% extension of the 2022 advance, and the 52-week moving average. Note that price has been tracking a parallel to the 2011 recovery (in pink). While the breadth of the April rebound suggests a low may be in place, this reference highlights the threat of a potential retest of trend support before resumption of the broader uptrend.

S&P 500 Price Chart – SPX500 Daily

Chart Prepared by Michael Boutros, Sr. Technical Strategist; S&P 500 on TradingView

A closer look at the daily chart highlights the speed of this recovery with the index now extending towards the 200-day moving average near ~5759. The next major technical considerations are eyed at the 100% extension of the April rally / January low-close at 5793 and the objective yearly open at 5818. Ultimately, a topside breach / close above the median-line is needed to mark uptrend resumption.

Initial support now rests with the March low at 5493 and is backed by the yearly low-week close (LWC) at 5369- losses below this threshold would once again threaten a test of the multi-year uptrend / the low-day close (LDC) at 5084.

Bottom line: The S&P 500 has staged an impressive rally off multi-year uptrend support with the recent recovery re-taking the yearly moving average. From a trading standpoint, losses should be limited to 5493 IF price is heading higher on this stretch with a breach above 5882 needed to challenge the highs.

Nasdaq Price Chart – NDX Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; NDX on TradingView

Technical Outlook: Nasdaq saw the largest share of the risk sell-off with a decline of more than 25.5% from the yearly highs. The decline gapped into and found resistance at the 2024 yearly open / 2021 high last month near 16,667/764. The bulls have enjoyed the largest recovery of the majors with NDX extending nearly 22% off the lows- resistance now in view.

The rally closed just above the 52-week moving average / 61.8% retracement of the yearly range at 20,020/52 but just below the 200-day moving average at 20,176. The immediate focus is on a breakout of this range for near-term guidance.

Bottom line: Nasdaq is now approaching resistance at former support near the 2022 uptrend. From a trading standpoint, losses would need to be limited to the LWC at 18,690 IF the index is heading higher on this stretch with a breach / close above the yearly open at 21,120 needed to suggest a more significant low is in place.

Dow Jones Price Chart – DJI Weekly

Chart Prepared by Michael Boutros, Sr. Technical Strategist; DJI on TradingView

Technical Outlook: The Dow briefly registered an intraweek low just below a key support pivot last month at 36,866-37,123 before reversing sharply with the 2022 uptrend still intact. The index has now recovered more than 13% off the lows with DJI eyeing weekly resistance near the 52-week moving average / 61.8% retracement of the November decline at 41648/839- looking for a larger reaction there IF reached.

Bottom line: The Dow would need to hold initial weekly support near the LWC at 40,212 IF the index is heading higher on this stretch with a breach / close above the yearly open at 42,660 needed to suggest a more significant low is in place.

Key Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Weekly Technical Charts

--- Written by Michael Boutros, Sr Technical Strategist with FOREX.com

Follow Michael on X @MBForex

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.