Technical Update - S&P 500 rejected at key resistance. Nasdaq in down trend. Dow Jones looks strong

Technical Update - S&P 500 rejected at key resistance. Nasdaq in down trend. Dow Jones looks strong

Equities 3 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank Group

S&P500 rejected at key resistance. Bear trend likely to resume
Nasdaq in confirmed downtrend, likely to test October lows
Dow Jones outperforms, will it have another go at key resistances?


S&P 500 was rejected at key resistance at around 3,907. A close above could have fueled a rally to test the medium-term falling trendline (black). Now S&P500 is back below 55 daily SMA and RSI was also rejected at 60 threshold i.e., still in negative sentiment.
If S&P drops lower to close below 3,647 the bear trend has resumed, and the Index is likely t test October lows below 3,500.

Source all charts and data: Saxo Group

Nasdaq 100 is back in bear trend after closing below 10,962. RSI is negative indicating lower levels below October lows at 10,440.
If Nasdaq 100 closes below October lows, which seems like a plausible scenario, 10K is in sight. However, 10K is more a psychological level than at technical level. If Nasdaq takes out the October low, it also drops below the consolidation area support from 2020. The pre-Covid peak at 9,736 is likely to be tested (and we will see a lot of media attention if that occurs) but as previously mentioned there is room down to around 9K.
8,910 is the 0.786 retracement of the entire 2020-2021 uptrend and 8,986 is the 1.764 projection of the Q3 2022 correction.
And 1.618 projection of the current correction is at 9,379, close to the pre-Covid peak at 9,736
An RSI close on weekly below the rising trendline will add to the bearish picture.

For Nasdaq to reverse this medium-term bearish trend a close above 11,682 is needed.
To reverse the short-term downtrend a close above 11,682 is needed.

Dow Jones Index (DJI) got rejected at the 0.786 retracement at 33,090. A few points below the resistance at 33,292 and the falling medium-term trendline (Black line)

RSI is still in positive sentiment with no divergence indicating Dow Jones could have another go at the resistance levels just mentioned. A close above 33,292 and the falling trendline DJI is likely to test key resistance at 34,281. But if DJI closes below 31,727 it could fuel a sell-off down to around 30,206 support. Some support at 31,387

Author is holding a short position in USNAS100

Quarterly Outlook

01 /

  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

None of the information provided on this website constitutes an offer, solicitation, or endorsement to buy or sell any financial instrument, nor is it financial, investment, or trading advice. Saxo Capital Markets UK Ltd. (Saxo) and the Saxo Bank Group provides execution-only services, with all trades and investments based on self-directed decisions. Analysis, research, and educational content is for informational purposes only and should not be considered advice nor a recommendation. Access and use of this website is subject to: (i) the Terms of Use; (ii) the full Disclaimer; (iii) the Risk Warning; and (iv) any other notice or terms applying to Saxo’s news and research.

Saxo’s content may reflect the personal views of the author, which are subject to change without notice. Mentions of specific financial products are for illustrative purposes only and may serve to clarify financial literacy topics. Content classified as investment research is marketing material and does not meet legal requirements for independent research.

Before making any investment decisions, you should assess your own financial situation, needs, and objectives, and consider seeking independent professional advice. Saxo does not guarantee the accuracy or completeness of any information provided and assumes no liability for any errors, omissions, losses, or damages resulting from the use of this information.

Please refer to our full disclaimer for more details.

Saxo
40 Bank Street, 26th floor
E14 5DA
London
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo is a registered Trading Name of Saxo Capital Markets UK Ltd (‘Saxo’). Saxo is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo assumes no liability for any loss sustained from trading in accordance with a recommendation.

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. Android is a trademark of Google Inc.

©   since 1992