Will the Q4 Rally Continue?
The S&P 500 and Nasdaq 100 are showing strong support.

Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free weekly newsletter.

Yesterday was a fairly uneventful day in the broaderU.S.equity markets. In fact, it has been a pretty uneventful week thus far. I suppose after the manic volatility we’ve seen since we entered August, calmer waters at least temporarily are to be expected. But I’m not expecting it to remain this “boring” for long, as the two-and-a-half-month trading range will have to give way to higher or lower levels soon. 

Technology led yesterday’s trade, while financials lagged courtesy of some profit-taking in JPMorgan Chase (NYSE:JPM). (I raised a flag on the potential immediate-term overbought levels in financials yesterday.) The lead by technology was well captured by the broader indices yesterday, as the Nasdaq 100 has now rallied 13% since last week’s bottom. 

On the weekly chart, the Nasdaq 100 shows great support at 2,030 and resistance at 2,330. Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG) and Amazon.com (NASDAQ:AMZN) are acting well, and should they be able to keep up investors’ spirits, it does look like the Nasdaq 100 might be able to power through 2,330 into the second half of Q4.

NDX Chart

The S&P 500 also remains in a wide trading range (1,100-1,200), and a breakout above 1,220 could move the index into the 1,260 area for a continuation of the Q4 rally. In the very near term, a solid support level to focus on is near the flattening 50-day moving average (blue line) of around 1,175.

SPX Chart

The all-important chart of the U.S. dollar index meanwhile is sneaking back down toward the breakout point from September, which will be an important area to watch for clues to equities.  

Dollar Index Chart

Other than that, without much going on, it’s best not to overanalyze and let the tape talk to us when it has something or importance to articulate.


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