Technical Analyst, Saxo Bank
Summary: S&P 500 finally breaking above falling trendline. Nasdaq in highest close of the year but more to come. Dow Jones and Russell 2000 bouncing from supports.
S&P 500 closed above falling trendline, above 55 daily MA and above 4K. RSI closed above 60 and has resumed to positive sentiment confirming that S&P 500 is in an uptrend. If S&P 500 can close above the 0.618 retraceme4tn at 4,048 and above the Cloud February peak at 4,195 is likely to be tested.
For S&P 500 to reverse the uptrend a close below 3,909 is needed.
Nasdaq 100 has performed the highest daily close in 2023. Despite divergence on RSI the trend is up with short-term potential to the 1.382 projection at around 13,333. However, there is no strong resistance until around 13,670 and if Nasdaq 100 closes above 12,881 it is quite likely to cancel (trade out) the RSI divergence.
A close below 12,407 is likely to result in a trend reversal.
Dow Jones is in a short-term uptrend with potential to 0.618 retracement at 33,233 where also the 55 and 200 MA’s are coming down adding to the resistance. If Dow Jones manages to close above 33,573 the Index could extend uptrend to 34,342 – 34,712.
However, RSI is still negative so if Dow Jones slides back to close below strong support around 31,738 the Index resumes downtrend with a likely move to 30,192
Russell 2000 bounces after the Bullish Engulfing bottom and reversal candle could continue up to the 0.382 retracement at 1,814 just below strong resistnace at 1,825.
Trend is still down and RSI showing negative sentiment. However, the divergence does support the bounce.
If Russell 2000 slides back below 1,722 downtrend is likely to be extended to 1,653.
See also this analysis Russell 2000 and S&P 500 are drawing patterns similar to 2007-2008, it is still valid
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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.
Uncover the shifting focus in 2024's FX markets towards growth resilience and relativity, away from bond yields and inflation stories.
Embrace the metal revolution on the commodity market in the coming year, with a focus on gold, silver, platinum, copper, and aluminum.
The gloominess of geopolitical conflicts and the repetitive nature of political agendas. What else does 2024 hold in store for us?
The disheartening cycle of unresolved geopolitical conflicts, the rise of polarizing political parties, and the stagnation of productivity.
Understand China's political landscape in Q4 2023 and the impact on counter-cyclical initiatives, with a focus on the pivotal Q1 2024.