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Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
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Technical Update - SP500 and Nasdaq 100 confirming down trends. Semiconductors leading the trends lower
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
Summary: S&P 500/ US500 and Nasdaq 100/USNAS100 closed yesterday below support levels confirming bearish trends with 5% downside potential
Semiconductor SOXX ETF is being sold off heavily but could be facing 5-10% further downside
S&P 500 closed yesterday below the 200 Moving Average and below support at around 4,195. RSI was rejected at the 40 threshold confirming downtrend.
S&P 500 has no strong support until at around 4,050. Minor support at around 4,098.
Medium-term: If S&P 500 is closing the week lower so the weekly RSI is closing below 40 threshold there is likely further downside potential for the Index in coming weeks
A sell-off down to the 200 weekly Moving Average just below 4K could be seen
For S&P 500 to reverse the trend a close above 4,395 is needed
S&P 500 future/US500 cfd Pre-market pointing to a lower open. Currently trading below support at around 4,165. Next strong support at around 4,050
Nasdaq 100 closed below minor support at around 14,505 and is likely to test the next support at around 14,254 from the opening bell.
The Nasdaq 100 future/USNAS100 cfd is at the time of writing trading around that level.
However, the support at 14,254 is not the strongest support. With the negative RSI Nasdaq could is indicating lower levels.
A bearish move below the 200 Moving Average to around 13,600-13,500 is in the cards.
If Nasdaq 100 is closing below 14,500 at the end of the week medium-term bearish trend is confirmed.
The Semiconductor sector illustrated by the iShares Semiconductor ETF SOXX closed yesterday below key support at around 444. Further selling should be expected. Minor support at around 430 strong support at around 401
A close back above the 200 MA will put the sector back in neutral. But to reverse the trend a close above 497 is needed
Disclaimer: Author is short USNAS100 and SOXX etf
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