Technical Analysis Article Iages_1_1024x768M Technical Analysis Article Iages_1_1024x768M Technical Analysis Article Iages_1_1024x768M

Technical Update - S&P 500 & Nasdaq 100: Strong rebound in US Equities might not be long-lived. Look out for the Gaps

Equity 2 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

S&P 500 and Nasdaq: Dropping yields sparking buying frenzy.

Short coverings, bottom fishers and quite likely FOMO (Fear Of Missing Out) buyers, is the probable cause of the strong rebound in US Equities.
But the strong rebound could easily fizzle and selling pressure resume



The market was ripe for a rebound, as stipulated in update Monday, but it came with a faster speed than anticipated resulting in S&P 500 jumping to the 0.382 retracement of the September sell-off just below 3,800.

RSI is showing divergence supporting the bottom and reversal scenario. However, S&P 500 must close above 3,907 before short-term uptrend will be confirmed. That level is also the close 0.618 retracement of September the sell-off.
However, if S&P 500 slides back and closes the gap from Tuesday bear trend is likely to resume pushing the Index below October trough at 3,585


SP500 d 5oct
US500 cfd (future) touched the 0.382 retracement of the September sell-off and seems to be rejected. Needs to break above yesterdays high for further upside. 
US500 d 5oct

Nasdaq 100 is back above 11K almost touching the 0.382 retracement of the September sell-off. Key resistance is at around 12,063 and the 0.618 retracement of the September sell-off and 0.382 retracement of the entire down trend since August peak. A close above 12,070 will confirm a short-term uptrend.
However, RSI is still showing negative sentiment without divergence indicating Nasdaq 100 could slide back. If it closes the gap from Tuesday morning lower lows on Nasdaq should be expected.

 

Nasdaq 100 d 5oct
USNAS100 cfd (future) touched the 0.382 retracement of the September sell-off and seems to be rejected. Needs to break above yesterdays high for further upside. 
USNas500 d 5oct
Source all charts and data: Saxo Group

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