Technical Analyst, Saxo Bank
Summary: Nasdaq 100 turned bullish and is set for higher levels
S&P 500 still caught in sideways range. Can it break it?
Dow Jones and Russell 200 in downtrends bouncing from supports. Strong overhead resistance
Today's Saxo Market Call podcast.
Today's Market Quick Take from the Saxo Strategy Team
Nasdaq 100 closed above short-term falling trendline and more importantly above 12,467 thereby resuming uptrend. RSI back above 60 confirms the bullish mood that has potential to move the Index above February peak and higher. If Nasdaq closes above 12,881 there is no strong resistance until around 13,667 just a few cents above the 1.618 projection of the February correction.
For Nasdaq 100 to reverse this bullish picture a close below 11,695
USNAS100 cfd levels. Bullish trend. Upside potential to 13,721 if breaking above 12,895. A move back below 12,179 will put the Index into neutral and a close below 11,668 will reverse the trend.
S&P 500 has bounced from the 0.786 retracement and back above 200 daily MA. The Index is facing some resistance at the cloud at 3,980 but if S&P 500 closes back above 55 daily MA the falling trendline is to be challenged. A close above the trendline could fuel a rally that is likely to take out 4,079 thus confirming a bullish trend. A close above 4,079 is likely to push RSI back above 60 threshold underlining the uptrend.
A close below 3,808 will demolish and reverse this scenario
US500 cfd is testing the lower cloud span at 3,980 and the upper falling trendline in a falling channel pattern. A break above and a break above 55 daily Moving Average is likely push US500 towards 4,100. A close above 4,380 could see US500 to challenge the 4,195 with potential to 4,308
A close below 3,808 will confirm the downtrend.
Dow Jones Index is in a confirmed downtrend but bouncing from the support at around 31,738. RSI is still showing negative sentiment and the Index is below 200 MA.
The current bounce could take Dow Jones above the 200 MA but will face resistance both at the 55 daily MA coming down and the lower Cloud span at 33,642. For Dow Jones to reverse to an uptrend a close above 33,572 is needed.
If Dow Jones drops back below 31,429 down trend will continue with next support at around 30,206.
Russell 2000 small cap Index bounced yesterday strongly from key support at around 1,722 forming a Bullish Engulfing bottom and reversal candle which strongly indicates further bounce is likely. Strong resistance at around 1,825 and at around 1,865.
A close below 1,716 is likely to extend the downtrend to support at around 1,653.
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.