Technical Analyst, Saxo Bank Group
Summary: Big cap Indices S&P 500 and Nasdaq 100 are leaving Small caps in the dust. Range bound Russell 2000 could resume downtrend
S&P 500 trading in a rising channel like pattern closing in on resistance at around 4,195. A close above paves the way towards strong resistance at around 4,308. No divergence on RSI supports the uptrend.
To reverse the uptrend a close below 3,906. If closing below the lower rising trendline and below 4,069 a set back to around 4K could be seen.
However, All Moving Averages are rising strongly indicating an bullish underlying sentiment.
Nasdaq 100 is short-term range bound but still in an uptrend overall. IF Nasdaq 100 takes out 13,189 the Index is likely to test 13,700 resistance area.
A close below 12,846 a correction down to around 12,500 possibly dipping down to around 12,518 where 55 daily Moving Average will provide support.
RSI indicates Nasdaq is likely to trade higher in coming 1-2 weeks.
Small cap Russell 2000 Index is underperforming the Big caps. Index seems to be caught in a range between 1,700 and 1,800. However, a daily close below 1,742 down trend is likely to resume for a move down to around 1,653.
Upside potential seems limited. 1,825 is a strong resistance level with both 55, 100 and 200 daily Moving Averages coming down putting a lid on the Index.
A close above 1,825 is needed for the Small cap index to fuel a rally higher
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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