Technical Analyst, Saxo Bank
S&P500 is testing the 200 Daily SMA and resistance at 4,475. For the leading US Index to fuel further upside a break above 4,490 is needed. If that plays out a move to resistance at around 4,600 is not unlikely. 55 SMA has crossed below 200 SMA and with the RSI (Strength Indicator) struggling to move above 60 (at the time of writing). If RSI cannot close above 60 Bears could get a comeback in the market. However, RSI is still showing Divergence which has not been traded out (can only be done by closing above 60 or dropping below previous RSI lows i.e. January trough)
A daily Index close below 4,400 could accelerate a sell-off to test lows around key support at 4,164
On the weekly time period S&P500 formed a Bullish Engulfing candle Friday which is a bottom and reversal candle and should support a rebound/further upside picture. However, the RSI is still below 60 i.e. still in bearish sentiment since it was last below 40. To add to that, RSI is below its falling trendline. If RSI fails to close above the rebound could be running out of steam. Medium trend is still down.
Friday, Nasdaq 100 closed above the resistance at 14,342 but to build on that and move higher from there RSI must close the day above 60. 55 Daily SMA is putting a lid on the upside indicating market to retrace from current levels.
The Index could be rangebound between 13K and 14,500 for the foreseeable future.
On the weekly time period Nasdaq 100 formed a Bullish Engulfing pattern. However, if the Index cannot follow through and RSI drops back below 40 this bottom and reversal pattern could be cancelled.
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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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.