S&P 500, Nasdaq, Dow Forecast: Battle Lines Drawn as Trump Tariffs Hit

Equities Technical Forecast: Weekly Trade Levels

Stocks remain constructive as Trump initiates tariffs on Canada, Mexico & China
SPX500 snaps two-week rally- holding just below resistance at record high (6102/130)
Nasdaq marks third weekly rally- trading mid-range below resistance at 22133
Dow largest gainer with three-week rally now testing resistance at 44974

Review my latest Weekly Strategy Webinar for an in-depth breakdown of these equity indices and more. Join live on Monday’s at 8:30am EST.

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 pared a portion of the early-week sell-off but still snapped to a two-week winning streak on Friday with price now probing confluent resistance at 6102/30- a region defined by the objective 2024 yearly high and the 100% extension of the broader 2020 advance. Note that the 75% parallel of the ascending pitchfork we’ve been tracking for years is just higher and a breach / close above this slope will be needed to fuel the next major leg of the advance. Looking for possible inflection off this slope early in the month.

Initial support / medium-term bullish invalidation rests with the December low- a level that converges on both the median-line and channel support over the next few weeks. A break / close below this slope would suggest a more significant high is in place / a larger reversal is underway towards the 1.382% ext at 5651 and the 52-week moving average near 5546- both levels of interest for possible downside exhaustion / price inflection IF reached. Losses would need to be limited to the 38.2% retracement of the late 2023 advance at 5358 for the 2022 rally to remain viable.

A topside breach / close above this pivot zone exposes subsequent resistance objectives at the 200% extension at 6344 and the 2.236% extension at 6608. Note that a price parallel of the 2020 advance (pink) remains in focus here and suggests the potential for a slow grind higher in the weeks ahead.

Bottom line: The S&P 500 testing resistance at last year’s highs and we’re on the lookout for possible infection here into the February open. From at trading standpoint, losses should be limited to 5803 IF price is heading higher on this stretch with above the upper parallel needed to fuel the next major leg of the advance.

Nasdaq Price Chart – NDX Weekly

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

Technical Outlook: Nasdaq has been trading into uptrend resistance since the start of the year at the median-line of the 2022 pitchfork. The 25% parallel has now been defended as support numerous times this month and keeps the broader uptrend in focus heading into February.

Initial resistance strands with the 2024 high at 22133 and is backed closely by the 1.618% extension of the August rally at 22451 and the 1.618% ext of the 2022 advance at 22943- both areas of interest for possible price inflection IF reached.

Initial support rest along the 25% parallel (currently ~21000) and is backed by the 100% extension at 20433. Broader bullish invalidation now raised to the 52-week moving average, currently near 19524- note that this level converges on the 1.38% slope over the next few weeks and a break below would be needed to suggest a larger trend reversal is underway.

Bottom line: While momentum indicators suggest the immediate advance may be vulnerable here, the broader outlook remains constructive while within this formation. Form a trading standpoint, losses should be limited to 20433 IF price is heading higher on this stretch with a close above 2133 needed to fuel the next leg of the advance.

Dow Jones Price Chart – DJI Weekly

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

Technical Outlook: The Dow marked a third consecutive weekly rally on Friday with DJI holding key resistance at the 2024 swing high / 1.618% extension of the August advance at 44974-45073. Yearly-open support rests at 42863 with a break / close below the 2023 channel line (red) needed to suggest a more significant high is in place / a larger correction is underway. Key support / bullish invalidation now raised to the 23.6% retracement / 52-week moving average at 40898-41198.

A topside breach / close above this pivot zone would threaten resumption of the broader uptrend with subsequent resistance eyed at the 100% extension of the 2020 advance at 47400 and the highlighted slope confluence near 49000.

Bottom line: The Dow responded to technical resistance this week at the record high with the broader outlook still constructive while within the 2023 channel. From a trading standpoint, losses should be limited to the yearly open IF price is heading higher on this stretch with a close above 44974 needed to fuel the next leg of the advance.

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

The information on this web site 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. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Products and services available depend on your location and the entity holding your account. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

Contracts for Difference (CFDs) are not available to US residents.

FOREX.com is a trading name of GAIN Capital - FOREX.com Canada Limited, 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA is a member of the Canadian Investment Regulatory Organization and Member of the Canadian Investor Protection Fund. GAIN Capital – FOREX.com Canada Limited is a wholly-owned subsidiary of StoneX Group Inc.

Complaints are taken very seriously at FOREX.com. You can view our complaints procedure here.

Know your advisor