Technical Update - S&P 500, Nasdaq and Russell 2000. Sell in May and go away ? Technical Update - S&P 500, Nasdaq and Russell 2000. Sell in May and go away ? Technical Update - S&P 500, Nasdaq and Russell 2000. Sell in May and go away ?

Technical Update - S&P 500, Nasdaq and Russell 2000. Sell in May and go away ?

Equities 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  Is it sell in (early) May and go away, or could there be one or two more weeks of upside?
S&P 500 could be in the process of forming a top and reversal pattern just below 4,195 key resistance level but a close above will pave the way to 4,300.
Nasdaq 100 in uptrend both short- and medium-term but Strength Indicator sends warning signal
Indicator tells us to be cautious with long positions from here.
Russell 2000 the weak Index and is likely to resume downtrend after a couple of weeks sideways trading


S&P 500. 4,195 is key resistance. Daily RSI is showing positive sentiment but there is Divergence indicating the uptrend is weakening and could have come to an end.
Yesterday S&P 500 formed a Gravestone Doji which is regarded as a top and reversal pattern. However, in reality a gravestone Doji 50/50 whether it will act as a top and reversal but with RSI divergence the chances of being just that rises.

On Weekly chart RSI has so far failed to close above 60 threshold i.e., it is still showing negative sentiment. S&P needs to close above 4,195 and RSI above 60 to reverse to positive sentiment.
If S&P 500 closes a day above 4,195 the RSI divergence on daily is being cancelled and the Index could move to 4,308 level.

If, on the other hand, S&P slides lower failing to close above 4,195 and instead closes below 4,049 short-term down trend has been confirmed with support at: 4K and 3,656.
However, the 4K level will be quite strong a support with both the 100 and the 200 daily Moving Averages, and the Ichimoku Cloud adding to the support.

A close below 3,808 will confirm a medium-term downtrend

Source all charts and data: Saxo Group

US500 cfd. Resistance at around 4,195. Support at 4,048. A break below is likely to lead to a sell-off down to 3,900-3,800 with support at 4K.

Nasdaq 100 is trading in uptrends short- and medium-term. On daily chart the higher close Friday indicated Nasdaq 100 is eyeing strong resistance area around 13,700.
However, RSI is currently showing divergence indicating the uptrend is stalling and weakening. To cancel the divergence a close above the horizontal dashed line is needed. A break above the falling trend trendline could be an indication that scenario to unfold, or that Nasdaq 100 at least will have a go at it (testing the horizontal line i.e., the previous RSI peak)

 Monday Nasdaq formed a Doji indecision candle. In itself it is not a reversal pattern but if the Index forms a bearish candle today we could have a top and reversal in place. But for short-term trend to establish a bearish trend a close below 12,724 is needed.
However, the rising 55, 100 and 200 daily Moving Averages are supporting the current uptrend. Strong support at around 11,830

Medium-term Nasdaq 100 is in an uptrend with no resistance until around 12,700 which is also top of the Ichimoku Cloud which adds to the resistance .
RSI is in positive sentiment but there is minor divergence but a higher Index close will very likely cancel that divergence and show higher values.
If Nasdaq 100 closes below 12,724 the medium-term uptrend could be in jeopardy and will reverse by a close below 11,695

USNAS100 cfd is in an uptrend with potential to around 13,658-13,721. RSI divergence indicates a weakening of the uptrend and a bearish break of the lower rising trendline is likely to lead to a test of support at 12,717. A close below will confirm downtrend. . Support at around 12,440 and the lower5 part of the Ichimoku Cloud (shaded area)

Russell 2000 Bearish picture is still intact on short- and medium-term as outlined in previous Technical Update. Technical analysis SP500 Nasdaq100 Russell2000

Author is holding a short position in Russell 200
Disclaimer

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000
Australia

Contact Saxo

Select region

Australia
Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.