PreFed Price Level Planning on SP500 Dow and NASDAQ

Jul 29, 2015: 11:35 AM CST

As we head into today’s Federal Reserve announcement, let’s quickly update our key levels on the “big three” US Stock Market indexes.

We’ll start with the S&P 500 with clear level planning:

Price once again rallied strongly away from the 2,065 target which is the rising 200 day SMA.

The initial target – achieved in a single day – was the 2,100 level or the confluence of the 20 and 50 EMA along with the simple “Round Number” reference level of 2,100.

At this point, stock prices are hovering at the 2,100 level as we await the Fed today.

In simplest terms, we’ll expect additional upside price action back to 2,135 if buyers can hold price above 2,100 or else we’ll be ready for another bearish swing down away from 2,100 toward 2,070.

Those are the S&P 500 simple price pathways. 

Let’s use the same logic for the Dow Jones Industrials Index – it’s weaker:

Unlike the S&P 500, the Dow Jones is beneath the rising 200 day SMA and challenging the underside.

The SMA overlaps the 17,750 level which is a prior price support pivot as noted.

Above 17,750, a wide “Neutral Zone” occurs between 17,750 and 17,900 which makes us cautious.

Should the Dow push above 17,900, it opens another bullish buy pathway higher.

Otherwise, 17,750 and 17,700 is our key pivot for a potential bearish swing taking us to 17,400.

Finally, the NASDAQ (tech heavy) Index has been the strongest of the three indexes:

Not only did the NASDAQ break to a new all-time high in July, it is also extended far from its 200 day SMA.

For now, the 5,050 level and 5,100 level remain our neutral zone as highlighted.

A further breakout above 5,100 targets new highs (bullish pathway) while a break under the 5,050 and 5,025 level opens yet another bearish sell pathway toward 4,900.

As we dissect the Fed and the price action, note these bull/bear and neutral reference levels.

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Corey Rosenbloom, CMT
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