Is Santa Claus not coming to the market this year?

Is Santa Claus not coming to the market this year?

Equities 6 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

In this Technical Update we'll have a look at S&P 500/US500, Nasdaq100/USNAS100, Russell 2000, DAX and OMX C25

With the depressed Equities market of late maybe the Santa Claus is not visiting the Exchanges this year. 
The Santa Claus rally is an event where Equity market is having short sweet rally starting just before Christmas lasting until first few trading days of the new year. Will Santa not visit this year? 
With the past couple of day's negative markets there is a risk. If we do not see a Santa Claus rally it historically spells trouble for the new year. 
Looking at the various Indices there is some indications that he might not come around this year. But jury is still out. 

Friday S&P 500 closed below the short term support at around 4.631 and followed that up with a gap yesterday testing the short term rising trend line. Another push below and we could see the leading US Index test the 4.495 support which could be crucial for a bull/bear scenario. A close below could fuel a sell off down to around 4.400-4.300.
This potential bearish scenario has been in the making for some time. Divergence on RSI has indicated that the uptrend was nearing its end.

Source: Saxo Group

The S&P 500 future/US500 CFD has continued the bounced from the closing session yesterday. If it can close above 4.630 there is a chance for a small year end rally.  

 

Source: Saxo Group

Nasdaq 100 is desperately trying to hold on to the bullish scenario but seems to be failing. It closed below the support at around 15.638. However, despite RSI showing divergence in November is hasn’t yet broken below 40 threshold which would indicate bearish sentiment.
Was it just a false break and can bulls push the Index back above 15.638. Next few days could be decisive.

Source: Saxo Group

Nasdaq100 future/USNAS100 CFD closed above its support at around 15.540 and is bouncing a bit further this morning.
Interesting to see if it can claw its way back above the 16K which could lead to a small year end rally. 
A close below support at around 15.540 could lead to a sell-off down to around 15.000-14.500.

Source: Saxo Bank

Last week I mentioned the Small cap index Russell 2000 was likely the leading indicator for the overall stock market. It is still holding on above its support at around 2.130. The support seems to be crucial for Bull/Bear scenario to play out.

Source: Saxo Bank

DAX found support at 15.100. the rebound from here seems to continue today at the opening but is fading at bit after a few hours of trading. If DAX closes below yesterday’s close at 15.239 we could see a new attempt to break the 15.100 support. A close below the support will confirm a bearish trend and the Index is likely to test 14.804 support.
RSI and MACD are both bearish and if we see RSI back below 40 there is a strong indication the 15.100 support will come under massive pressure.
For DAX to reverse the likely bearish scenario to play out a close above 15.780 is needed.

Source: Saxo Bank

I don’t often write about the Danish Equity market but since I have given an interview to the Danish finance newspaper Børsen about OMX C25, here are the main point:

1.800 is the support to look out for in OMX C25. A close below the support will confirm a down trend. Adding to that, with the bounce at the end of the session yesterday and today being back above 200 SMA the Index is showing resilience to Bears i.e. the Index seems to be range bound between 1.800 and 1.950.

Source: Saxo Bank

Quarterly Outlook

01 /

  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

Content disclaimer

None of the information provided on this website constitutes an offer, solicitation, or endorsement to buy or sell any financial instrument, nor is it financial, investment, or trading advice. Saxo Bank A/S and its entities within the Saxo Bank Group provide execution-only services, with all trades and investments based on self-directed decisions. Analysis, research, and educational content is for informational purposes only and should not be considered advice nor a recommendation.

Saxo’s content may reflect the personal views of the author, which are subject to change without notice. Mentions of specific financial products are for illustrative purposes only and may serve to clarify financial literacy topics. Content classified as investment research is marketing material and does not meet legal requirements for independent research.

Before making any investment decisions, you should assess your own financial situation, needs, and objectives, and consider seeking independent professional advice. Saxo does not guarantee the accuracy or completeness of any information provided and assumes no liability for any errors, omissions, losses, or damages resulting from the use of this information.

Please refer to our full disclaimer and notification on non-independent investment research for more details.


Business Hills Park – Building 4,
4th Floor, office 401, Dubai Hills Estate, P.O. Box 33641, Dubai, UAE

Contact Saxo

Select region

UAE
UAE

All trading and investing comes with risk, including but not limited to the potential to lose your entire invested amount.

Information on our international website (as selected from the globe drop-down) can be accessed worldwide and relates to Saxo Bank A/S as the parent company of the Saxo Bank Group. Any mention of the Saxo Bank Group refers to the overall organisation, including subsidiaries and branches under Saxo Bank A/S. Client agreements are made with the relevant Saxo entity based on your country of residence and are governed by the applicable laws of that entity's jurisdiction.

Apple and the Apple logo are trademarks of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.