S&P 500, Nasdaq, Dow Forecast for the Week Ahead

Equities Technical Forecast: Weekly Trade Levels

• Seasonal tendencies highlight risk into September as the weakest month for stocks
• S&P 500 lower on the week despite fresh record highs- snaps three-week winning streak
• Nasdaq biggest loser on the week as index holds below key resistance
• Dow breakout stalls after three-week rally- outlook remains constructive
• Battle lines drawn on the SPX, NDX, and DJI weekly technical charts

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 snapped a three-week advance on Friday with the index slipping 0.21% after registering fresh all-time highs. The rally failed at 75% parallel of a multi-year formation off the 2022 low and the focus is on a reaction off this slope in the weeks ahead.

It’s worth noting that September is seasonally the weakest month for stocks and with weekly momentum marking bearish divergence into these highs immediate advance may be vulnerable into the monthly open while below 6500.

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 shows the S&P 500 trading within a multi-week consolidation pattern (potential rising wedge in red) just below uptrend resistance (blue). The focus is on a breakout of this formation for guidance with daily momentum also flagging divergence into these highs.

Initial support rests with the July high-day close (HDC) / August open at 6343 and is backed by the objective August low near 6214. Key support rests at 6130/40- a region defined by the 100% extension of the 2020 advance, the 2025 yearly opening-range highs, and the February high-day close. Losses below this level would suggest a more significant high is in place / larger reversal is underway- area of interest for possible downside exhaustion / price inflection IF reached.

A topside breach of this formation exposes subsequent resistance objectives at the 1.382% extension of the yearly range breakout at 6665 with the next major technical consideration eyed at 6911/98- a region defined by the 2.618% extension of the April advance and the 1.618% extension of the yearly range. Note that the upper parallel converges on this threshold next month- look for a larger reaction there IF reached.

Bottom line: The S&P 500 consolidating below uptrend resistance with building momentum divergence heading into a seasonally weak period. From a trading standpoint, a good zone to reduce portions of long-exposure / raise protective stops- losses should be limited to consolidation support IF price is heading higher on this stretch with a close above the 75% 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 marked a second consecutive weekly decline (-0.27 %) with the index holding below confluent resistance at the upper parallel / 61.8% extension of the yearly range breakout at 23823. Momentum divergence is not quite as prominent here but nonetheless has been identified.

Initial support rests along the 75% parallel and is backed by the 2024 high at 22133- weakness beyond this threshold would suggest a more significant pullback is underway. Broader bullish invalidation remains with the yearly open / 2024 high-week close (HWC) at 21120/289.

A topside breach / close above the upper parallel (blue) keeps the focus on subsequent resistance objectives at 24640-25041, 26000, and the 1.618% extension of the broader 2020 advance at 26609.

Bottom line: Nasdaq is trading just below confluent resistance near the record highs- threat for further near-term weakness within the broader uptrend heading into the September open. From a trading standpoint, losses should be limited to 22133 IF price is heading higher on this stretch with a close above the upper parallel needed to mark trend resumption.

Dow Jones Price Chart – DJI Weekly

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

Technical Outlook: The Dow Jones Industrial Average snapped a three-week winning streak on Friday but closed the week well off the lows. The index broke through key resistance last week at the 2024 high / high-close at 44910-45071. Unlike its counterparts, the Dow is not flagging divergence on this advance and while the index is vulnerable to seasonal tendencies, the outlook remains constructive while above this threshold with medium-term bullish invalidation now raised to the February reversal-close at 43428.

Initial resistance objectives eyed at the 46000 psychological barrier and is backed by the 100% extension of the broader 2020 advance at 47400- look for a larger reaction there IF reached.

Bottom line: IF the Dow breakout is legitimate, losses should be limited to 44910 on a weekly close basis with a breach above 4600 needed to fuel the next major leg of the advance.

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

Follow Michael on X @MBForex