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Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
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Technical Update - S&P 500 & Dow Jones breaking key resistances. Nasdaq 100 eyeing all-time highs
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
Summary: S&P500/US500 closed above resistance at 4,546 likely to test next resistance
Nasdaq 100/USNAS100 closing in on 16K eyeing all-time highs
Dow Jones/US30 broken key resistance. Likely to break back above 35K
S&P 500 closed yesterday above resistance at around 4,546. S&P500 has been forming a rising channel pattern in a strong uptrend. An uptrend that is quite stretched but could continue higher to 4,637 and all-time highs.
RSI divergence indicating a stretched uptrend but if RSI closes above the horizontal line on the daily chart i.e., above 76.36, the divergence has been cancelled (traded out) indicating likely higher Index levels.
To reverse medium-term uptrend a close below 4,328 is needed. First indication of that scenario to play out could be a bearish break of the lower rising trendline. A closed below 4,455 could spur a short-term correction.
No RSI divergence on weekly indicating likely test of all-time highs at around 4,818
US500 cfd has formed a rising wedge like pattern. Similar to the S&P500 cash Index there is RSI divergence but it can be cancelled by a higher US500 close.
A bearish break of the lower rising trend line could be the first warning sign of a correction. A close below 4,375 will confirm it (a correction)
Nasdaq 100 is nearing the 16K mark lead by Microsoft that closed almost 4% higher yesterday in new all-time high.
There is RSI divergence but if Nasdaq records a higher close the divergence is to be cancelled suggesting higher Index levels. Nasdaq is less than 1,000 points from all-time highs at around 16,765.
Nasdaq has been trading in a quite narrow rising channel since Q2 with relatively minor corrections.
To reverse the bullish trend a close below is 14,687 is needed. First indication of that scenario to play out is likely to be a bearish break of the lower rising trendline
USNAS100 cfd getting close to 16K and could test it today Wednesday. Key questions is whether RSI can cancel its divergence i.e., close above 78.26.
A minor correction down to test short-term rising trendline could be seen but the medium-term trend is up. A close below 14,687 is needed to reverse that
Dow Jones Index closed above resistance at around 34,464 a couple of days ago, now on course to test next strong resistance at around 35,294. A close above that resistance is likely to push the Index to test all-time high at around 36,952.
To reverse the bullish trend a close below 33,610 is needed.
US30 cfd: Resistance at around 35,383
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