Wall Street Traders Report April 28th

Wall Street Trader Report April 28th

It’s been several weeks since my last blog post as I decided to take 2 weeks off from trading the markets. In that time I have been able to take a step back and analyse the broader market sentiment without the pressure of finding new trading opportunities. This article will focus solely on the three main US financial indexes of the Dow Jones, S&P500 and the Nasdaq 100.

Dow Jones Index

In early April the Dow Jones tested the December 31st resistance level of 16,600 but failed to clear this level and subsequently fell and held at the support level of 16,050. The rally has headed back up towards the 16,600 level but appears to be losing momentum. The current chart looks to be forming the right shoulder of a top reversal head and shoulders pattern. If the index continues to fall and then breakdown below the 16,050 support then this would signal a valid head and shoulders reversal formation. At that point further declines towards the next support level of 15,350 would be possible.

Dow Jones Index

S&P 500 Index

The broader S&P500 index has been slightly less volatile than the Dow Jones index above. It is currently range trading in a longer term up trend. The price appears to be having trouble clearing the 1,900 resistance level and it would not surprise me to see the price head back towards the up-trend line and find support there before it pushes higher.

S&P 500 Index

Nasdaq 100 Index

The Nasdaq is currently trading in a downward trend channel and making a series of lower highs and lower lows. The bigger picture shows the possible formation of a head an shoulders reversal pattern as I have illustrated with the three black circles. I see the index pushing back towards the support level of 3,420 in the coming weeks and if this level is broken then it would validate the reversal pattern. At this stage I will be staying on the sidelines for any long position trades for shares in the top 100 Nasdaq Index.