Daily signal chart of SPY

Hourly signal chart of NQ:

Executive Summary

Recent price action in the NASDAQ 100 and SPY indicates potential short-term recovery following a prolonged corrective phase. While technical indicators suggest an early-stage bullish reversal, overhead resistance levels and macroeconomic uncertainties warrant a cautious approach. We maintain a neutral-to-cautiously bullish stance over the next 5–7 trading sessions, contingent on the ability of indices to sustain momentum above key technical levels.

Market Overview & Technical Analysis

NASDAQ 100 – Hourly Chart Analysis

• Trend Structure: The NASDAQ 100 has been in a prolonged downtrend but recently triggered a buy signal as price rebounded off support near 19,400.
• Moving Averages: Short-term moving averages (e.g., 20-hour and 50-hour) are beginning to slope upward, suggesting a possible shift in momentum. However, the longer-term 200-hour MA remains downward-sloping, reinforcing overhead resistance.
• Momentum Indicators:
• MACD is showing early signs of a bullish crossover but remains in negative territory.
• Stochastic RSI is rising from oversold levels, indicating a potential short-term bounce.
• Key Resistance Levels: 20,450, followed by 20,800.
• Key Support Levels: 19,742 (recent pivot low) and 19,400 (critical downside level).

SPY – Daily Chart Analysis

• Trend Structure: SPY remains in a short-term correction, but a recent buy signal suggests a potential stabilization phase.
• Moving Averages: The price remains below key MAs, suggesting the broader trend is not yet bullish.
• Momentum Indicators:
• MACD is showing divergence, implying that downside momentum is fading.
• RSI remains neutral, lacking a strong directional bias.
• Key Resistance Levels: 520, followed by 528.
• Key Support Levels: 505 and 498.

Market Outlook & Trade Implications

• Base Case Scenario (60% Probability): A short-term rally continues, with NASDAQ 100 testing 20,450–20,800 and SPY targeting 520. This assumes momentum sustains and buyers step in at key support levels.
• Bearish Scenario (30% Probability): Failure to hold recent gains results in a retest of support levels, leading to renewed selling pressure below 19,742 (NASDAQ 100) and 505 (SPY).
• Bullish Scenario (10% Probability): A rapid breakout above 20,800 (NASDAQ 100) and 528 (SPY), signaling a stronger-than-expected market recovery.

Investment Strategy:

• Short-term traders: Consider long positions if NASDAQ 100 holds above 19,742 and SPY above 505, with a stop-loss below support.
• Medium-term investors: Maintain a neutral stance, awaiting confirmation of a sustained uptrend.

Conclusion

While technical indicators suggest a potential short-term rebound, broader market conditions remain uncertain. A sustained move above resistance levels is necessary to confirm a shift in trend. Investors should closely monitor macro data releases, interest rate developments, and corporate earnings guidance for further confirmation of market direction.

Disclaimer: This report is for informational purposes only and does not constitute investment advice. Market conditions are subject to rapid change, and investors should conduct their own due diligence before making trading decisions.