Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Access both platforms from your single Saxo account.
Technical Update - SP500 and Nasdaq 100 could gain an additional 3-6%, but the uptrend is showing signs of being stretched and fragile
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
- Corrections in US indices are over. With new all-time highs, the top and reversal patterns have been cancelled
- S&P 500/US500 and Nasdaq 100/USNAS100 could gain a further 3-6% over the next few weeks
- Indicators are pointing to trend exhaustion, meaning the uptrends are quite stretched
- No top and reversal patterns in place medium-term just yet, however.
S&P 500 closed yesterday at a new record high, thus taking out and cancelling/reversing the top and reversal pattern from 23 May. The reversal has been fairly limited, only down to the 0.382 retracement at 5,193. The index is now set for higher levels. A bullish move to 5,435–5,492 is in the cards.
In a previous Technical Update a Cup with a Handle-like pattern with upside potential to 5,722 was described. The two dashed vertical arrows are illustating the upside potential.
The 0.786 extension of the cup is at 5,483, between the 1.618 and the 1.764 projection of the April correction at 5,457–5,502. Almost the same projection targets as the levels mentioned in the first section.
If the S&P 500 does not slide back to close below 5,190, that bullish scenario will stay intact.
However, the uptrend is a stretched.
Weekly traded volume is and has been in decline since mid-Q1. A decline that has accelerated over the past few weeks.
RSI is currently showing divergence, indicating uptrend exhaustion. A weekly close above 79 is required to cancel that.
A weekly Index close below 4,953 will establish a bearish medium-term trend.
However, there is yet no top and reversal pattern in place to indicate the bullish trend is ending. Divergence in volume and RSI are merely just warning signs that a trend is stretched and in exhaustive mode.
Divergence is when an instrument is making a higher high value, but the technical indicators such as RSI and volume are declining. It is a sign of imbalance in the market. An imbalance or divergence that cannot go on forever.
US500: short-term upside potential to 5,442–5,502. A close below 5,185 will reverse the uptrend.
Nasdaq 100 is showing almost similar behaviour; correction down to the 0.382 retracement. Yesterday, new all-time high with short-term upside potential to 19,350.
Medium-term the Cup with a Handle has upside potential to 19,550–20,127 - see weekly chart.
Declining RSI values and traded volume are indicating that the bullish trend is stretched and in an exhaustion phase.
A weekly RSI close above 75.76 will cancel the divergence, supporting even higher index levels.
Medium-term key support at around 16,969. A daily close below 18,189 will demolish and reverse the bullish trend short-term.
USNAS100 CFD: Short-term upside potential to 19,404. A daily close below 18,186 will reverse the bullish scenario.
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ... -
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
FX: Risk-on currencies to surge against havens
Charu Chanana
Chief Investment Strategist
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo... -
Quarterly Outlook
Equities: Are we blowing bubbles again
Peter Garnry
Chief Investment Strategist
Explore key trends and opportunities in European equities and electrification theme as market dynami... -
Quarterly Outlook
Macro: Sandcastle economics
Peter Garnry
Chief Investment Strategist
Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p... -
Quarterly Outlook
Bonds: What to do until inflation stabilises
Althea Spinozzi
Head of Fixed Income Strategy
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ... -
Quarterly Outlook
Commodities: Energy and grains in focus as metals pause
Ole Hansen
Head of Commodity Strategy
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...
Disclaimer
The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)