Technical Analyst, Saxo Bank
Summary: S&P 500 and Dow Jones in confirmed downtrends short-term, close to resume medium-term bearish trend . Nasdaq 100 indecisive still holding on. Russell 2000 found support after heavy sell-off. VIX retracing
US500 and USNAS100 cfd levels included.
S&P 500 closed yesterday with in few cents of the 0.786 retracement level at 3,856 after being sold off early in the session and is indicated to open higher and a rebound to 3,929-3,949 could be seen. But the trend is down and selling pressure is likely to resume shortly.
RSI below 40 supports this and indicates likely lower levels on the short-term. A move down to 3,720-3,656 over the next week or tow is in the cards.
To reverse this bearish outlook a close above 4,079 is needed. Early indication of a reversal scenario to play out would be a close above 4K.
S&P 500 is back below its medium-term falling trend line and if the Index performs a weekly close below 3,764 the medium-term bearish trend has resumed.
The weekly RSI is still showing bearish sentiment and is close to break its rising trend. IF it does it will re-confirm the down trend
US500 cfd technical picture. Bounce from 0.786 retracement at 3,856. Resistance at around 3,948. To reverse bearish trend a close above 4,079.
Nasdaq 100 closed back above the Gap (11,966-11,814) and back above the 55 SMA. RSI is still positive indicating further rebound should be expected. The Index seems indecisive however, with no clear trend. It could be range bound for the next couple of weeks between 11,700 and 12,350. But if Nasdaq 100 closes below 11,695 this very short-term down trend is to be extended and could push the index to 11,250-11,000.
A close above 12,467 is likely to give the Index energy to take out February peak at around 12,881.
Medium-term Nasdaq 100 is having trouble getting above the 55 weekly Moving Average. If dropping back below 200 Ma bear trend is likely to resume . RSI weekly is showing negative sentiment and if RSI closes below its rising trendline it is likely to drop back below 40 confirming the bearish trend.
USNAS100 cfd bounced from 100 daily MA and is back above 55 and 200 MA. The Index cfd seems to be forming a falling channel and to resume uptrend a move above 12,468 is needed. Strong support at 11,329
Dow Jones Index managed to close just above support at around 31,738 and the medium-term falling trendline. A minor rebound should be expected but the trend is down supported by the negative RSI.
A close below 31,738 is likely to fuel another sell-off down to around 30,260.
To reverse the downtrend a close above 33,572 is needed.
Russell 2000 small cap index touched and bounced from strong support at around 1,722. Further bounce should be expected possibly up to strong resistance at around 1,825. Russell 200 could be range bound between those two levels for the next couple of weeks. A close below 1,722 there is support at around 1,653 but is likely to drop to 1,467
To reverse this overall bearish scenario a close above 1,932 is needed. Closing above 200 MA i.e., above 1,826 could move the range bound area up to between 1,825 and 1,900.
VIX (Volatility) index shot up the past couple of days to reach the 0.786 retracement level around 31,06. Now retracing and could drop back below 200 daily MA. i.e., below 24. RSI is bullish however, and could keep VIX elevated for the next few weeks.
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.
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.
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.