Technical Analyst, Saxo Bank
Summary: Bottom fishers lifted the the US Equity market from the opening but big sellers sold off heavily towards the end of last night's trading session
US Equities confirming down trends breaking important support levels
S&P500 broke its rising trend line a few days ago initiating a short term bear trend. On the same trading day 18th January it also broke below the Neckline (dashed line) in what could be a complex Shoulder-Head- Shoulder pattern (two left shoulders). Break of the Neckline gives a price target around the support at 4,364. The break below the Neckline also took the RSI below 40 threshold i.e. indication bear sentiment.
Yesterday the Index below the below support important at 4,495 confirming the down trend. 200 SMA will offer some support.
Nasdaq 100
It was not without some fight from Bulls that Nasdaq 100 had to give in a close below support at around 15,508. Yesterday the index closed below the 200 SMA and is well on its way towards the strong support at around 14,482.
Nasdaq Composite
The Nasdaq Composite looks even worse and illustrates that it is small cap that seems to lead the down turn. The broad Index dropped below the 200 SMA a few days ago and yesterday it took out the strong support at around 14,255.
Support at 13,615 and 13,032. However, there will be some up days but the trend is down and will take several strong bullish days to reverse that.
Russell 2000
The Russell 2000 Index illustrates that it is small caps leading the bear market . After being range bound for several weeks on Tuesday the Index closed below the strong support at 2,130 initiating a bear trend. Next strong support is around 1,945.
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.