Technical Update - Nasdaq 100 and S&P 500
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: US Stock market gapped lower at the opening yesterday. What should be the key focus over the next couple of days is whether Bulls can close the gap. If the gap is closed we are likely to see a re-test of key resistance levels
Nasdaq 100 opened yesterday below 14K but bounced off key support at around 13,837. Three different technical indicators overlap each other around that level; the 55 SMA, the 0.382 Fibonacci retracement level and the mid-February peak where selling resumes after a strong bounce.
If buyers can close the gap next couple of days we are likely to see a re-test of resistance at around 14,504. RSI is still showing positive sentiment and no divergence but MACD line is close to cross over the Signals which would be a bearish signal. A bit of a muddy picture indeed.
However, Market is trading below most medium term and longer term Simple Moving Averages and with yesterdays lower levels short term bear trend is confirmed (Lower Low and Lower High).
Support at 13,354 and around 13,040
S&P 500 bounced off 0.382 Fibo retracement but closed below 200 SMA. If buyers can close the gap next couple of days we are likely to see a re-test of resistance at around 4,591.
However, similar to Nasdaq 100 short term down trend is confirmed but also here RSI with showing positive sentiment without divergence makes the picture a but muddy.
However, big test for S&P500 is the key support at around 4,400.
Latest Market Insights
Q4 Outlook 2022: Winter is coming
- Winter is coming to the financial markets as central banks are tightening their grip. How spring will look is still a question.
European energy crisis: it will get worse before it gets betterThe winter in Europe will be tough, but whether the result is political chaos or sustainable, innovative solutions is still undecided.
A difficult and volatile quarter awaitsAs the year draws to an end, commodities continue to be at centre stage of the world with growth pockets political uncertainty.
The bright side: crises drive innovationThe positive spin on crises is that they come with solutions. It is worrisome that deglobalisation may be a response to this crisis.
Green transformation in China: renewable energy and beyondGoing green, China needs to span numerous energy sources to ensure stability, as every source comes with a challenge.
Asia: Intermittent solutions, but a faster renewable adoption curveAsian energy supply is being squeezed. This and the adoption of renewables may change the investment sentiment in the region.
FX: A Fed thaw needed to deliver a sustained USD turn lowerThe US Dollar can keep momentum when the Federal Reserve continues to tighten, leaving the rest to play to their drum.
Autumn can become ugly for equities and bond holders. Comfort for Dollar longsTechnical analysis suggests that equities could face a tough Q4 as could fixed income. US Dollar positions could provide some upside.
The next stock market sector to watch, with stocks going nuclearAs the world scrambles to find affordable, sustainable energy, nuclear is getting attention from politicians and investors alike.
The crypto space is getting cold when the hype disappearsCryptocurrencies face a winter of their own as retail investors and governments are asking tough questions.