Technical Analyst, Saxo Bank
Nasdaq 100 formed last week a top an reversal pattern. Sell-off has since hit the Index lead by Nvidia – see separate analysis.
Nasdaq seems destined to test the support and the 0.382 retracement at 19,347-19,290.
A close of the gap i.e., a close below 19,210 is likely leading to further selling down to the 0.618 retracement and support at 18,875
However, RSI is still showing positive sentiment and there is no divergence i.e., no imbalance indicating this is merely just a correction and the Index is likely to resume uptrend when done.
But if Nasdaq 100 is closing below 18,873 and RSI is closing below 40 threshold a bearish trend has been established
USNAS100 cfd levels. Minor support at the 0.382 retracement at 19,358. Strong support at around 18,900 where both the 0.618 retracement of the latest bullish move and the 0.382 retracement of the uptrend since mid-April are also placed.
A close above 20,083 and the bullish trend will resume
S&P 500 bullish trend seems to be stalling and a correction is unfolding. Question is how deep and will it turn into a downtrend.
Key support at around 5,340 but a dip down to 5,311 could be seen.
Minor support at the 0.382 retracement at 5,385
For S&P500 to resume bullish trend a daily close above 5,506 is required. That scenario is not unlikely to plays out; RSI is still showing negative sentiment with no divergence indicating this is merely just a correction and S&P500 is likely to resume uptrend after a correction
A daily close below 5,310 is likely to add to the selling pressure pushing the Index down to around 5,258-5,191
RSI is moving within a rising channel pattern: A daily close below the lower rising trendline and the 60 threshold is an indication the Index is likely to test the key support at around 5,314
US500 levels: Minor support at 5,391 and 5,346. Strong support at 5,315. A daily close above 5,516 and the bullish trend will resume
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.