Macro: Sandcastle economics
Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.
You can access both of our platforms from a single Saxo account.
Technical Update - S&P 500 rejected at key resistance. Nasdaq in down trend. Dow Jones looks strong
Kim Cramer Larsson
Technical Analyst, Saxo Bank
S&P500 rejected at key resistance. Bear trend likely to resume
Nasdaq in confirmed downtrend, likely to test October lows
Dow Jones outperforms, will it have another go at key resistances?
S&P 500 was rejected at key resistance at around 3,907. A close above could have fueled a rally to test the medium-term falling trendline (black). Now S&P500 is back below 55 daily SMA and RSI was also rejected at 60 threshold i.e., still in negative sentiment.
If S&P drops lower to close below 3,647 the bear trend has resumed, and the Index is likely t test October lows below 3,500.
Nasdaq 100 is back in bear trend after closing below 10,962. RSI is negative indicating lower levels below October lows at 10,440.
If Nasdaq 100 closes below October lows, which seems like a plausible scenario, 10K is in sight. However, 10K is more a psychological level than at technical level. If Nasdaq takes out the October low, it also drops below the consolidation area support from 2020. The pre-Covid peak at 9,736 is likely to be tested (and we will see a lot of media attention if that occurs) but as previously mentioned there is room down to around 9K.
8,910 is the 0.786 retracement of the entire 2020-2021 uptrend and 8,986 is the 1.764 projection of the Q3 2022 correction.
And 1.618 projection of the current correction is at 9,379, close to the pre-Covid peak at 9,736
An RSI close on weekly below the rising trendline will add to the bearish picture.
For Nasdaq to reverse this medium-term bearish trend a close above 11,682 is needed.
To reverse the short-term downtrend a close above 11,682 is needed.
Dow Jones Index (DJI) got rejected at the 0.786 retracement at 33,090. A few points below the resistance at 33,292 and the falling medium-term trendline (Black line)
RSI is still in positive sentiment with no divergence indicating Dow Jones could have another go at the resistance levels just mentioned. A close above 33,292 and the falling trendline DJI is likely to test key resistance at 34,281. But if DJI closes below 31,727 it could fuel a sell-off down to around 30,206 support. Some support at 31,387 Author is holding a short position in USNAS100
Latest Market Insights
Quarterly Outlook 2024 Q3
Sandcastle economics
-
-
Bonds: What to do until inflation stabilises
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.
-
Equities: Are we blowing bubbles again
Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.
-
FX: Risk-on currencies to surge against havens
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.
-
Commodities: Energy and grains in focus as metals pause
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.
Disclaimer