Technical Update - S&P 500 & Nasdaq rebound cut short. Indices closed gaps and resumed down trend
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Friday US Equities closed gaps created earlier that week with a 0.382 Fibonacci retracement bounce of the September bear move.
S&P500 closed bang on previous old support at 3,636 and Nasdaq 100 closed spot on its previous support at 11,037, few cents off lows. Down trend has resumed and is likely to push the Indices lower over the next couple of weeks.
RSI on S&P 500 closed below 40 threshold indicating likely lower levels and if it closes below its lower rising trendline selling pressure is likely to accelerate pushing S&P 500 to support at around 3,500. However, the 3,500 level is not a strong support. S&P 500 is at risk to drop to the 0.618 retracement of the 2020-2021 uptrend and the lower level of the consolidation area back in Q4 2020 at around 3,200.
Short-term; If S&P 500 closes above 3,807 the Index could move strong resistance around 3,900
Nasdaq 100 closed just a few points above its September low is set for lower levels. Next key support is at 10,677, close to the 0.618 retracement of the 2020-2021 uptrend at 10,590. If Nasdaq closes below that levels the Index is at risk to penetrate 10K. 1.618 projection of the Q3 correction is at 9,378, a level that is not unlikely to be reached if earnings season starting this week becomes very disappointing to the market.
To reverse the downtrend Nasdaq 100 must close above 13,721. Short-term a close above 11,660 will revive the bounce around 12K. For that to play out a bullish gap on daily chart is needed.
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