Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
Technical Analyst, Saxo Bank
Semiconductors Index (illustrated here by the iShares SOXX ETF) formed yesterday a bearish engulfing top and reversal.
RSI divergence has been warning about trend exhaustion. SOXX is likely to test its lower rising trend line and a break below is likely to push SOXX down to support at around 242.59
Companies like Nvidia, TSM and AMAT are big constituents in this ETF
A daily close above Thursday peak at 267.24 is required for SOXX to resume to bullish trendNasdaq 100 could be testing its lower rising trendline. A close below is likely leading to further sell-off down to 19,500-19,347
RSI divergence has been warning about trend exhaustion and now the tide could be turning.
To resume uptrend a close above 20,691 is requiredS&P 500 top and reversal pattern. Contrary to Nasdaq the S&P 500 Index is not showing RSI divergence which suggests S&P could move higher. However, the Bearish Engulfing pattern is a fairly reliable reversal indicator
If closing below its lower rising trend line the support at around 9,447 could come under pressure. A close below could fuel further selling down to around 5,340.
To demolish this top and reversal pattern a daily close above 5,643 is required
Russell 2000 small cap (IWM ETF) has confirmed bullish trend. Positive sentiment on RSI is supporting the bullish picture.
A bullish trend that can lift the Index/ETF higher towards 227 level.
On the weekly chart the ETF has broken bullish out of its corrective triangle like pattern which gives upside potential to 220-227 as indicated by the Fibonacci extension lines
To demolish this bullish scenario a daily close below 207.50 is required