Technical Analyst, Saxo Bank Group
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
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
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
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
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