Technical Analyst, Saxo Bank
Summary: US Equity Markets bounced strongly Friday. Nasdaq 100 close to cancel top and reversal pattern and could be eyeing 13,700.
S&P 500 bounced from 4,050. Can it reach key resistance at 4,195
Russell 2000 bounced from 1,700 testing falling trendline. Upside potential seems limited
S&P 500 bounced from support at around 4,050 moving back above rising trendline. Key resistance is at 4,195. A close above could push the Index to 4,300 resistance level.
There is still divergence on RSI and the top and reversal pattern Gravestone Doji/Evening Doji pattern is still valid. S&P 500 needs to close above the Grave Stone Doji to cancel that
A close below 4,050 will confirm downtrend.
US500 cfd. Strong support at 4,050. Strong resistance at 4,195 for a move to 4,300.
Nasdaq 100 has essentially been range bound between 12,800 and 13,290 for 4 weeks by now. The Index spiked a few cents above top and reversal pattern peak but failed to close above. A close above is needed to cancel the Evening Doji like top and reversal pattern drawn earlier last week.
An Index close above 13,288 and RSI close above back above 60 will pave the road for the Index to 13,700 area. There would still be divergence until RSI closes above the horizontal dashed line, however.
If the Nasdaq 100 slides back to close below 12,724 bear trend has been confirmed. A close below 12,938 would be first indication of that scenario to play out. Strong support at around 12,563
USNAS100 cfd bouncing from rising trendline. If breaking above 13,290 USNAS is set to move higher towards 13,700
Key strong support at around 12,800. If closing below rising trendline the support Is likely to come under pressure.
Russell 2000 small cap bounced from 1,700. Could test the upper falling trendline. A close above could spark a short-term rally to strong resistance around 1,825.
The 55, 100 and 200 daily Moving Averages will offer strong resistance for further upside.
A close below 1,700 could send the Index in to a sell-off down to 1,650 key support.
2024: The wasted year
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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.