NASDAQ 100, Dow Jones 30 & S&P 500 Analysis | U.S. Indices Pull Back Before Fed Decision

What to Know

• U.S. indices open lower on Tuesday amid uncertainty over the Fed’s December rate decision.
• NASDAQ 100 eyes support around 25,500, with the 50-Day EMA nearby.
• Dow Jones 30 finds strong psychological support at the 47,000 level.
• S&P 500 fills last week’s gap and tests 6,800 support, aligning with its uptrend line.
• Despite short-term weakness, the broader U.S. market trend remains bullish.

The overall attitude of markets is somewhat negative at the open on Tuesday, but quite frankly, these markets have been bullish in the United States for a while, so a little bit of a pullback should be thought of as a potential opportunity by most traders. The question still lingers about what the Federal Reserve might do with the next interest rate decision in December, as the latest press conference had seen Jerome Powell stating that “a rate cut isn’t a done deal.”

That being said, there are a lot of questions about the artificial intelligence sector, as there are signs of a massive bubble forming, but quite frankly, those bubbles tend to last much longer than people anticipate. Ultimately, the uptrend is still very much intact, but it does look like we are taking a little bit of a short-term breather.

NASDAQ 100

The NASDAQ 100 is lower in premarket trading on Tuesday, as the market looks as if it is going to threaten the 25,500 level. The market breaking down from there opens up the possibility of a test of the gap from last week, and then finally the 25,000 level, where we also see the previous uptrend line and the 50 Day EMA offering a bit of support as well. Ultimately, the market is still very much in an uptrend, but a little bit of a pullback is going to bring new money into the market.

Dow Jones 30

The Dow Jones 30 fell significantly overnight, but it does look like it’s trying to turn around and cause a bit of a bounce early in the normal market hours. The 47,000 level seems to be offering a bit of support, which of course, is a large, round, psychologically significant figure, and an area where we had seen a lot of resistance previously, lending itself to offer “market memory” in this scenario. US stock markets are still strong, and the small bounce that we have seen in premarket trading does suggest that perhaps traders are willing to come back into this market and pick up “cheap stocks.”

S&P 500

The S&P 500 plunged in premarket trading to fill the gap from last week, and perhaps more importantly, test the 6800 level. The 6800 level is an area that had been previous resistance, so much like in the Dow Jones 30, it looks like “market memory” is coming back into the picture. We also have the 50 Day EMA and the uptrend line underneath that will offer support. The S&P 500 is being lifted by many of the same stocks of the NASDAQ 100 is and most certainly the sink sectors, so pay attention to those larger technology stocks as they could give you a bit of a “heads up” as to where we go next. All things being equal, it is still very much in an uptrend, and that is the overriding theme in this, as well as the other indices.

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