Details Cookies
Hong Kong S.A.R
Cookie policy

This website uses cookies to offer you a better browsing experience by enabling, optimising and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy here and our privacy policy here

Technical Update - US Indices confirm bearish trend on all horizons Technical Update - US Indices confirm bearish trend on all horizons Technical Update - US Indices confirm bearish trend on all horizons

Technical Update - US Indices confirm bearish trend on all horizons

Equities 5 minutes to read
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  All major US Equity Indices have confirmed down trends on short, medium and longer term. The start to 2022 is worse than both 2008 and 2009 (the so-called Financial Crisis) and there is not much comfort in the charts and indicators. May going in to June can become a major challenge for the markets. Comparing the past few years Bull market to markets in 1990's draw similarities that should worry investors

S&P 500 closed Friday below key support at 4,164 confirming down trend that could be accelerated. Short term a daily close above 4,309 will putt the outlook on neutral but medium term would still look bearish. RSI below 40 supporting negative sentiment outlook.

Source: Saxo Group

Medium term bear trend scenario is unfolding. S&P 500 closed last week at the lowest weekly closing level in a year.
Weekly RSI is back below 40 and moving in a falling channel

There is no support before around 3,815 which is also the 0.382 Fibonacci retracement of the post Corona scare sell-of bull market.
Close to the 3,815 level the 1.618 Projection of the March-April bullish correction is at 3,791.
A price level that is not unlikely to be reached before summer. Sell in May and GO away could hit hard this year.
However, looking a bit further ahead, there is further down side risk to the consolidation area 3,500-3,200 after a possible summer correction.

Source: Saxo Group

From the Monthly chart I will refer to our Q2 Outlook page 28-29, published about a month ago. Here I analyse Dow Jones Industrial Average Index.
Summary; “
Going back 40+ years the stock market has experienced periods of longer-running bull markets followed by almost as many larger corrections and even a couple of market crashes. 
Examining these historic uptrends and corrections a bit closer we can see that in the build-up to every single larger correction there have been warning signs in the form of divergence in the market. Divergence is an indication of an imbalance and can been read from technical indicators such as RSI, MACD and volume. If price is rising under falling traded volume it is a sign of weakness.
Similarly, it is a sign of a weakening trend if prices keep rising but the RSI is falling; that is exactly what we have seen in the run-up to market peaks and corrections”
. And exactly what we have seen the past couple of years; massive divergence i.e. imbalance in the markets, that now seem to commence its "trading out" scenario. A scenario that can lead to much lower levels over the next months

The picture is identical on S&P 500, Dow Jones and Nasdaq.


Source: Saxo Group

The Equity markets have clear Bubble picture. If we compare the past couple of decades with one of the most famous ones, the Tech/.com from the 1990’s there are clear similarities, and if history is any guide and repeat itself, which it often do in Financial markets especially when we are talking about bubbles, the price level will always come down to at least the around the peak of the so-called Pre-peak area. For S&P500 that could equate to around 3,400.

If that scenario unfolds it doesn’t happen overnight, of course, or in next few weeks but can unfold over the next 6-18 months.

Source: Saxo Group
Source: Saxo Group

Nasdaq 100 closed below key support at 13K. Down trend confirmed. Next support is at around 12,208 and 11,152.

Source: Saxo Group

Dow Jones Industrial is in a short term down trend. Key support at 32,632 is not broken however, but it is most likely a question of a couple of days. 

RSI is below 40 threshold showing negative sentiment indicating lower levels are likely. No strong support before around 29,881-29,625.

Source: Saxo Group

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo Capital Markets HK Limited holds a Type 1 Regulated Activity (Dealing in securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged foreign exchange trading); Type 4 Regulated Activity (Advising on securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong

By clicking on certain links on this site, you are aware and agree to leave the website of Saxo Capital Markets, proceed on to the linked site managed by Saxo Group and where you will be subject to the terms of that linked site.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

Please note that the information on this site and any product and services we offer are not targeted at investors residing in the United States and Japan, and are not intended for distribution to, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Please click here to view our full disclaimer.