Technical Analyst, Saxo Bank
Summary: Rebounding US Indices have broken short term resistance levels. Does the rebound have more legs to go?
S&P 500 closed the gap Friday indicating further upside could be seen to strong resistance at 3,974 possibly at test of 4K.
If sellers manage to take back control and push S&P 500 below 3,820 last week’s low at 3,636.
Keep an eye on traded volume. It was higher than normal Friday but need to keep rising/stay high if short term upwards move in the Index should continue.
RSI still showing negative sentiment and no divergence indicating we are likely to see lower lows on the Index
Nasdaq 100 rebound opened Friday above the resistance at 11,825 and closed just shy of 0.618 retracement at 12,187 which is likely to offer some resistance. If breaking above a test of key resistance at 12,458 is likely. If Nasdaq 100 closes above that level the Index is back in to neutral short-term. The divergence on RSI supports the short-term rebound picture.
If rejected selling pressure is likely to resume. If closing below 11,752 selling could intensify pushing the index to new lows.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.