Technical Update - DAX, S&P 500, Nasdaq 100 and Russell 2000
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: Major Indices seem to be bouncing off support and could be set for new highs.
DAX is trying to close the body gap (between the two horizontal dotted lines) it made a couple of weeks ago but seems to be trapped in that body gap range between 15.878 and 15.472. A close below or above those levels is likely to give direction.
A close below 15.472 and DAX is likely to re-test support at around 15.100. A close above 15.878 a re-test of previous highs are not unlikely.
S&P 500 found support at around 4.500 and the 55 Simple Moving Average (SMA) and a short term uptrend has been established. A close below 4.631 will likely reverse the bullish scenario. A scenario that is likely to lead to new All-Time highs.
Nasdaq 100 bounced off the 55 SMA and support at around 15.638. Some resistance at 16.455. A close above and new highs should be expected.
A close below 16.128 and we could very well see Nasdaq 100 re-test support around 15.638.
However, the small cap Index Russell 2000 could be the joker here. Small caps seem to be under pressure and a re-test of support at around 2.150 is not unlikely. A close below could fuel a bigger sell-off in small caps spilling over to a sell off in big caps.
However, if Russell 2000 manages to move back above 2.277 we could see Santa visiting the Exchanges. But with the RSI in bearish sentiment and no divergence the risk is to the downside.