Technical Update - S&P 500 & Nasdaq. Rebound time, but for how long?
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: The past 8 days of selling in US Equities looks to be set on pause for a few days. Minor correction should be expected. But a correction that most likely will not be long lived before selling could hit Equities again
S&P 500 ended last week with a neutral day. Short term the sell off could be exhausted and a minor rebound over the next couple of days should be expected.
However, the trend is down. No divergence on RSI indicates we are still to see lower levels towards the end of June.
A rebound will likely be short lived to resistance at 3,838 where selling pressure is likely to return. If S&P 500 closes above 3,838 it will try to close the gap up to 3,900. If it fails, it is a strong sign of weakness.
Down trend in S&P 500 accelerated last week breaking below falling lower trend line. There is no strong support until around 3,500 i.e. top of the consolidation area and 0.50 retracement of the 2020 low to 2022 peak. A dip below the 200 weekly SMA to 3,385 is not unlikely. However, the strongest support is around 3,210 which is both the 0.618 retracement
AND the bottom of the correction prior to the confirmation of the start of the bull market Q4 2020.
RSI in a falling channel with no divergence supporting the picture of lower levels.
Nasdaq 100 is set to open higher today after a long weekend. A correction to around 11,747 is likely before selling pressure most likely resumes. RSI is showing divergence supporting the correction scenario. A correction that could extend to around 0.618 retracement at 12,186 if the Index closes above 11,825. A close below 11,037 down trend will resume
Nasdaq spiked lower Friday retracing a few points off the top of support area of 10,960. RSI is showing divergence indicating weakening of the down trend. However, the trend IS still down and no bottom and reversal pattern formed meaning lower levels should be anticipated. The strong Consolidation/support area is key for the longer term picture
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.