Technical Update - SP 500 and Nasdaq 100. Correction unfolding Technical Update - SP 500 and Nasdaq 100. Correction unfolding Technical Update - SP 500 and Nasdaq 100. Correction unfolding

Technical Update - SP 500 and Nasdaq 100. Correction unfolding

Equities 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  A correction seems to be unfolding in the US Main Indices. With weekly charts in the process of forming top and reversal patterns , further 3%, maybe 5% down side could be seen


S&P 500/US500 cfd was yesterday hit by heavy selling. A correction seems to be unfolding. A correction that is likely to take S&P 500 to test the lower rising trendline and support at around 4,793.
A close below both could increase the selling pressure pushing S&P 500 down to test the key support at around 4,687

RSI divergence has been warning of an imbalance in the market, a looming trend exhaustion. And now it seems to be unfolding.
For S&P 500 to resume uptrend a close above 4,931 is needed

Source all charts and data: Saxo Group
On the weekly chart S&P 500 could be forming a Bearish Engulfing pattern. For that to unfold  a close tomorrow Friday below last week’s opening price at 4,853 is required

Nasdaq 100/USNAS100  is likely to be testing the support at around 16,963 following yesterday’s sell-off. The correction has been looming after RSI started to show divergence a few days ago. A correction is unfolding. A correction that is likely to test support at around 16,963. A close below is likely to push the Index lows to strong support at around 16,249 - 16,165.

The rising 55 DMA will offer some support which could limit the depth of the correction

 

Weekly Nasdaq 100 chart seems to be in the process of drawing a Doji Evening top and reversal like pattern – circled (ideally the body of the Doji – last week – and the body this week’s bearish candle should not overlap). Nevertheless, the top and reversal indication should not be ignored.
Combined with RSI showing divergence there is strong indicating of a larger correction.

For Nasdaq 100 to resume and extend the uptrend behaviour a close above 17,665 is needed

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research 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. To the extent that any content is construed as investment research, you must note and accept that the 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 under relevant laws.

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

Saxo Bank (Schweiz) AG
The Circle 38
CH-8058
Zürich-Flughafen
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.