Macro: Sandcastle economics
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Technical Update - S&P 500, Nasdaq 100, Dow Jones Industrial & Russell 2000
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: S&P 500 testing 4K. Strong overhead resistance. 4,110 resistance is key for medium-term bullish trend
Nasdaq still struggling to gain upside momentum and could slide back after bounce
Dow Jones showing strength could break 35K
Russell 2000 small caps could turn bullish on medium-term. 1,906 is key.
S&P 500
Yesterday S&P 500 closed less than a dollar below the 200 daily SMA and below the medium-term falling trendline.
RSI also closed below the 60 threshold and since RSI closed below 40 28th December (circled) it is still showing negative sentiment. However, the volume has been rising during the past two weeks of rebound which is a sign of strength.
If S&P 500 manage to close above the falling trendline the next key resistance is 4,110. A close above that level will reverse the overall bearish trend short- and medium term.
For the more TA savvy: S&P 500 is trading above the daily Ichimoku Cloud indicating higher S&P 500.
Nasdaq 100 closed just a few points above the resistance at around 11,450. 11,450 is not a key strong resistance however, and the fact that RSI didn’t close above 60 is a sign of weakness. RSI needs to close above to change that.
Nasdaq 100 still has strong overhead resistance. 100 daily SMA has historically been putting a dampener on the Bulls and the medium-term falling (black) trend line and 200 daily SMA might also be a hard nut to crack.
Nasdaq 100 is in the Ichimoku cloud. A close above could indicate further upside but if the lagging Span fails to close above the cloud that upside could be limited.
Dow Jones Industrial is showing strength after bouncing off the falling medium-term trendline it is now testing the 0.786 retracement.
RSI back above 60 indicating likely higher Index levels. If Dow Jones closes above 34,715 next resistance is at around 35,492.
A close below 33,420 will pause the uptrend but it would need a close below 32,580 to reverse it.
Russell 2000 small cap index has been on the rise of late and is closing in on key resistance at around 1,906. RSI is showing positive sentiment strongly indicating Russell will test the resistance soon. A close above could pave the way to 2K . To reverse this bullish scenario a close below 1,790 is needed.
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