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Technical Update - S&P 500 & Nasdaq 100 top and reversal pattern demolished. Uptrend could be resuming

Equities 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  S&P 500 / US500 cfd. Nasdaq 100 / USNAS100 cfd
The potential Shoulder-Head-Shoulder patterns that were under development in both S&P 500 and Nasdaq 100 were demolished yesterday.
The strong bullish move could result in both Indices testing July peaks. However, uptrends are not yet confirmed by Indicators. Mood can easily turn sour again


S&P 500 Closed back above rising trendline and back above the Cloud.
The Shoulder-Head-Shoulder S&P500 that were under development seems to have been demolished by the Index close yesterday above 4,459.

The key support 4,340 where not broken meaning the SHS pattern where never confirmed.
S&P 500 has now resumed to uptrend.
However, RSI is still showing negative sentiment and needs to close above 60 to change that.
If RSI does close above 60 there is more upside potential for S&P500. Potential to test July high at around 4,607

If RSI is failing to close above 60 S&P 500 could slide back towards key support at 4,430

sp500 d 3008
Source all charts and data: Saxo Group

US500 cfd: Back above rising trendline and back above the Cloud
RSI is still showing negative sentiment and needs to close above 60 to change that.
If RSI does close above 60 there is more upside potential for US500. Potential to test July high at around 4,607

If RSI is failing to close above 60 US500 could slide back towards key support at 4,430

us500 d 3008

Nasdaq 100 By closing above 15,367 Nasdaq 100 has reversed its downtrend and cancelled it Shoulder-Head-Shoulder like pattern.
Bears can still hang their hat on the fact that RSI is still showing negative sentiment and needs to close above 60 to change that.

If RSI does close above 60 there is more upside potential for Nasdaq 100. Potential to test July high at around 15,932. This scenario is likely to play out if the Index is closing above the Cloud (shaded area)

If RSI is failing to close above Nasdaq could slide back towards key support at around 14,687

nasdaq100 d 3008

USNAS100 cfd. Seems to be building an uptrend when closing yesterday above 15,366.
However, USNAS100 closed just below the upper part of the Cloud and RSI still needs to close above 60 threshold for uptrend confirmation.

If RSI does close above 60 USNAS100 is likely to test July peak at around. Key question will then be whether the Evening Doji top and reversal pattern will be cancelled.  

If RSI is failing to close above 60 and instead is being rejected USNAS100 could test the key support at 14,687.
A close below there is downside potential to 13,568 but with strong support at around 14,250.

A close above 15,366 will demolish the top and reversal scenario and confirm uptrend
usnas100 d 3008

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