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Technical Update - SP500/US500 and Nasdaq 100/USNAS100: Corrections in downtrends

Equities 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  S&P 500 bouncing from 4,100 and Nasdaq 100 from just above 14K in what are likely just corrrections. Short- and medium-term trends are still down

S&P 500 has bounced from support at around 4,100. Combined with RSI divergence which is indicating a weakening of the downtrend, correction up to minor resistance at around 4,230 and the 200 daily Moving Average seems likely.
If S&P500 is closing above 4,260 there could be further upside potential to 4,331.

However, the declining 55 daily Moving Average indicating underlying bearish trend will provide resistance suggesting further upside could be quite a struggle.
If S&P 500 is failing to close back above the 200 Moving Average selling pressure will resume pushing the Index lower towards 4K.

Medium-term S&P 500 is in a down trend (lower lows and lower highs) supported by negative sentiment on RSI.

Currently hovering around the declining 55 and the rising 100 Moving Averages. With one of them declining and the other rising there is a conflict of the underlying medium-term trend.

However, for S&P 500 to reverse the medium-term downtrend a close above 4,394 is needed. A first indication of this scenario to play out would be weekly RSI closing above 60 threshold.

sp500 d 0111
Source all charts and data: Saxo Group
sp500 w 0111

US500 cfd: correction. Likely to test the 0.382 retracement and resistance at around 4,215, possibly spiking up to the 200 Moving Average. A close above 4,267 could extend the rebound to around 4,335

If failing to close above the 200 Moving Average selling pressure is likely to resume with lower levels to follow.

us500 d 0111

Nasdaq 100 correction is likely to test resistance at around 14,505. A close above could give energy to 14,781.
Declining 100 and 55 Moving Averages are adding to the overhead resistance

Daily RSI is not showing divergence indicating lower levels are could be seen.
If Nasdaq slides back to close below 14,250 downtrend is likely to resume with a likely move below 14K  

Medium-term, Nasdaq 100 is in a downtrend with no strong support until around 13,565. However, RSI is still in positive sentiment, but for Nasdaq 100 to reverse the trend a close above 15,334 is needed
nadaq100 d 0111
nadaq100 w 0111

USNAS100 cfd bounce could test resistance and 0.382 retracement at around 14,550. A close above could give extra energy to resistance at around 14,848.
If rejected down trend is to resume with a likely bearish move below 14K to follow

usnas100 d 0111
Author of the article is short USNAS100 cfd

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