Technical Analyst, Saxo Bank
Summary: Nasdaq is leading the way with confirmed uptrends both short and medium-term. Another 4% upside short-term before facing strong resistance
S&P 500 trailing with an uptrend on the medium-term not yet confirmed. 4,195 is key.
Small Cap Russell 2000 bouncing but facing strong overhead resistance. Could be range bound for weeks
S&P 500 moved within cents of the 0.786 retracement at 4,112. RSI closed above 60 and is now showing positive sentiment indicating higher levels. Big test is the 4,195 peak from February which is likely to be tested.
A close above will pave the way to 4,308 resistance – see weekly chart.
With a close above 4,195 S&P 500 has confirmed medium-term uptrend. Weekly RSI will likely close above 60 supporting the bullish outlook also on medium-term.
If closing above 4,195 S&P 500 will also close back above the Cloud further confirming the bullish picture.
To reverse the short-term uptrend a close below 3,909. A close below 3,808 the medium-term downtrend will resume.
Nasdaq 100 is closing in on the 1.382 projection at around 13,133. But there is likely more upside in store for Nasdaq.
Nasdaq 100 is also in an uptrend on the medium term – see weekly chart. RSI above 60 adding to the bullish picture. Key resistance at around 13,565-13,720 could be tested in a couple of weeks.
If Nasdaq 100 collapses to close below 12,517 it will be in a neutral position. A close below 11,695 will reverse the uptrend
Russell 2000 bounce seems to continue but is facing resistance at around 1,825. A close above will give energy to resistance at around 1,865 and the 55 daily Moving Average.
Medium-term on weekly chart Russell has formed a Doji Morning bottom and reversal pattern bound from support at around 1,722.
Russell 2000 could bounce higher to strong resistance at around 2,016. However, the 200 and 55 weekly Moving Average’s around 1,830-1,845 will provide resistance and can be a struggle to move above. However, if it does Russell could move to around 2K could be tested. Possibly being caught range bound between 2,000 and 1,640 for the better part of Q2.
A close below 1,695 could give energy to take out key support at around 1,641.
2024: The wasted year
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.
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With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
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.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.