Technical Analyst, Saxo Bank Group
Summary: S&P 500 / US500 cfd. Nasdaq 100 / USNAS100 cfd
The potential Shoulder-Head-Shoulder patterns that were under development in both S&P 500 and Nasdaq 100 were demolished yesterday.
The strong bullish move could result in both Indices testing July peaks. However, uptrends are not yet confirmed by Indicators. Mood can easily turn sour again
S&P 500 Closed back above rising trendline and back above the Cloud.
The Shoulder-Head-Shoulder S&P500 that were under development seems to have been demolished by the Index close yesterday above 4,459.
The key support 4,340 where not broken meaning the SHS pattern where never confirmed.
S&P 500 has now resumed to uptrend.
However, RSI is still showing negative sentiment and needs to close above 60 to change that.
If RSI does close above 60 there is more upside potential for S&P500. Potential to test July high at around 4,607
If RSI is failing to close above 60 S&P 500 could slide back towards key support at 4,430
US500 cfd: Back above rising trendline and back above the Cloud
RSI is still showing negative sentiment and needs to close above 60 to change that.
If RSI does close above 60 there is more upside potential for US500. Potential to test July high at around 4,607
If RSI is failing to close above 60 US500 could slide back towards key support at 4,430
Nasdaq 100 By closing above 15,367 Nasdaq 100 has reversed its downtrend and cancelled it Shoulder-Head-Shoulder like pattern.
Bears can still hang their hat on the fact that RSI is still showing negative sentiment and needs to close above 60 to change that.
If RSI does close above 60 there is more upside potential for Nasdaq 100. Potential to test July high at around 15,932. This scenario is likely to play out if the Index is closing above the Cloud (shaded area)
If RSI is failing to close above Nasdaq could slide back towards key support at around 14,687
USNAS100 cfd. Seems to be building an uptrend when closing yesterday above 15,366.
However, USNAS100 closed just below the upper part of the Cloud and RSI still needs to close above 60 threshold for uptrend confirmation.
If RSI does close above 60 USNAS100 is likely to test July peak at around. Key question will then be whether the Evening Doji top and reversal pattern will be cancelled.
If RSI is failing to close above 60 and instead is being rejected USNAS100 could test the key support at 14,687.
A close below there is downside potential to 13,568 but with strong support at around 14,250.
Bond. Long Bond(s)
With real rates being too positive, we see three scenarios: Opportunity to lock in rates at cycle high, government overreach to keep the economy afloat or a complete reset of the economy.
Steen Jakobsen,
Chief Investment Officer
Is a bond bull market ahead? Inflation still poses a risk for investors, but the moment for increasing duration to your portfolio may be approaching towards the end of the year, when central banks might be forced to cut interest rates.
Althea Spinozzi,
Senior Fixed Income Strategist
The furious rate hike cycle has brought gains in the US dollar, but with stagflation risks in Europe and the UK and weakness in the Chinese economy, USD may have more room to run. But a strong dollar could also have repercussions for US growth, emerging markets and commodity prices.
Charu Chanana,
Market Strategist
With the cost of capital rising painfully, stagflation fears are back, illuminating the fragile state of the green transformation, while giving a tailwind to nuclear power, and threatening the growth of AI-related stocks.
Peter Garnry,
Head of Equity Strategy
With supply tightness not only in energy but all commodities, the momentum in commodity prices may continue, pressuring central banks to lower real rates. That could be a good setup for precious metals, including gold, silver and potentially platinum as well.
Ole S. Hansen,
Head of Commodity Strategy
As the pandemic showed, even the US Treasury can experience seismic shifts. With the government increasing the pace of issuing bonds to support fiscal spending, the complex Treasury market and regulatory constraints could spark a liquidity event.
Redmond Wong,
Market Strategist
The tide has turned for bonds. Given the current yields, bonds have become an attractive investment, with added benefits including lower risk than stocks, increased diversification and a steady stream of income unaffected by economic changes.
Peter Siks,
Investment Coach
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