Technical Update - S&P 500, Nasdaq 100 and Dow Jones Index
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
US Equity markets gapped higher at the open, but can they keep up?
S&P 500 key resistance is at 3,812.
Nasdaq 100 key resistance 11,682.
Can Dow Jones extend uptrend?
S&P 500 jumped on the opening currently testing the 0.618 retracement at 3,879. However, key resistance is at 3,912. A close above could fuel a rally to around 4,100.
If S&P 500 slides back below 55 SMA and below 3,800 thereby closing the gap created at the open, selling pressure is likely to accelerate
RSI is still showing negative sentiment and must close above 60 to switch to positive. The divergence on RSI remains until RSI closes above 60. However, if RSI closes below its rising trendline it indicates bear trend to resume.
US500 cfd chart below S&P 500 chart
Nasdaq 100 has bounced from 0.786 retracement and the upper falling trendline, gapping higher at the open. Trend is still down however and will remain bearish until Nasdaq 100 closes above 11,682.
If the Index closes above 11,682 it will have confirmed Double bottom like pattern. With a potential target of 1.618 to 2.00 projection of the pattern i.e., 12,300 – 12,731.
If Nasdaq 100 fails to close above 11,682 and instead slides back closing the gap from the open and RSI closes below its rising trendline Nasdaq 100 is likely to test October lows.
USNAS100 cfd chart below Nasdaq 100 chart for levels
RSI is showing divergence indicating a weakening and possible exhaustion of the trend. If Dow closes the gap from the open and closes below its steep short-term rising trendline Dow Jones is likely to slide back to around 31,700-31,000.
Latest Market Insights
Q4 Outlook 2022: Winter is coming
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)