S&P 500, NASDAQ – TECHNICAL OUTLOOK:
- The S&P 500 is risking a break beneath a long-term transferring common.
- The Nasdaq Composite Index dangers one other leg decrease, probably lasting for just a few weeks.
- How way more draw back is probably going forward and what are the important thing ranges to observe?
S&P 500 SHORT-TERM TECHNICAL OUTLOOK – BEARISH
US fairness benchmark indices are trying weak as they check essential help, risking one other leg decrease within the coming weeks.
The S&P 500 index is testing key converged help on the 200-week transferring common, roughly coinciding with the June low of 3640. The index was final decisively beneath the four-year transferring common in the course of the Covid selloff in 2020 and the 2007-2009 Nice Monetary Disaster. Any break beneath might push the index decrease in direction of the 2020 excessive of 3394, adopted by the September 2020 low of 3249.
S&P 500 Every day Chart
Chart Created Utilizing TradingView
Regardless of the 17% fall since August, there isn’t any signal of reversal but, however a minor optimistic divergence on the weekly chart (falling index related to a stalling/rising momentum). Except the index is ready to break previous rapid resistance finally week’s excessive of 3807, the development stays bearish. For medium-term downward strain to fade, the index would wish to rise above resistance on the 200-day transferring common (now at about 4185). For the second, momentum on the month-to-month chart continues to level to additional weak point.
NASDAQ COMPOSITE INDEX SHORT-TERM TECHNICAL OUTLOOK – BEARISH
The Nasdaq Composite Index is threatening to interrupt beneath pretty robust help on the June low of 10565. The feeble/shallow rebounds since August appear to lift the percentages of a break decrease. If historical past is any information, a break beneath help might indicate about one or two extra months of downtrend (see chart).
NASDAQ COMPOSITE Weekly Chart
Chart Created Utilizing TradingView
January’s fall beneath key help on the October 2021 low noticed weak point persist till mid-March. Equally, Could’s drop beneath the February-March lows dragged the index decrease till mid-June. Therefore any break beneath the June low means that the index might preserve a mushy bias till the tip of the yr.
By way of the extent of the decline, the January and the March breakouts triggered down strikes of round 12%-15%. Assuming the decrease finish of this vary, the potential goal would work out to round 9275. Robust help is on the pre-Covid excessive of 9838. For the medium-term downtrend to alter/reverse, at minimal, the index wants to interrupt above the 200-day transferring common (now at about 12725) – the 2 rebounds this yr have run out of steam on the common.
— Written by Manish Jaradi, Strategist for DailyFX.com
DailyFX supplies foreign exchange information and technical evaluation on the tendencies that affect the worldwide forex markets.
