The models are broken
The market is trying to get back to the pre-Covid and pre-war times, but that model is broken. A new dawn is here and the financial world needs to adapt.
Steen Jakobsen,
Chief Investment Officer
Technical Analyst, Saxo Bank
We are still seeing strong resistance at 6,840 in the Nasdaq 100 despite Tuesday's relativelt strong tech-sector performance. The index has now been rejected twice at this level, so despite the bullish candle posted Tuesday, this could still prove an issue over the next couple of sessions. Another thing to note is that the Relative Strength Index remains bearish for this index.
Ultimately the Nasdaq 100 needs to close above 6,840 for further upside. If it does, we could see new highs. Zooming in on the intraday chart, however, we see a potential double top formation in the making; an hourly close below 6,740 would confirm it.
That scenario would likely lead to a selloff, taking the index to a test of the key support line at 6,400 (we also see some support around 6,600).
In the S&P 500, we see a shooting star where the body gap of the early February selloff couldn’t be closed. This was followed by a bear gap Tuesday, which indicates trouble for bulls. Also note that the RSI is turning south again.
A drop to around 2,673 looks likely for this index. For bulls to regain control, they need to bring the S&P 500 to a close above Friday's highs at around 2,755.