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S&P 500 and Nasdaq 100 Technical Outlook – Long-Term Downtrends Meet Short-Term Uptrends

S&P 500 and Nasdaq 100 Technical Outlook – Long-Term Downtrends Meet Short-Term Uptrends

Nick Cawley, Senior Strategist
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S&P 500 and Nasdaq 100 – Technical Forecasts and Analysis

  • S&P 500 testing an important longer-term downtrend.
  • Nasdaq 100 struggling to hold gains despite trend break.
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US equity markets are giving back some of their weekly gains after the latest labor report showed that the US jobs market remains resilient. The NFP release - 263k jobs created vs expectations of 200k - turned risk markets negative on the day, with US stocks markets between 1% and 1.5% as we write. Despite the losses, US indices remain in positive territory for the week, aided on Wednesday by a mildly dovish speech from Fed chair Jerome Powell.

Euro (EUR) Latest: EUR/USD Set for Further Gains After Fed Powell’s Dovish Nudge

The S&P 500 is currently pressing against a longer-term downtrend off the January 2022 high. This trend – lower highs and lower lows – is being challenged by a shorter-term uptrend off the October 13 low, with yesterday’s attempted break rejected. In addition, the 200-day moving average is also in play, adding to a mixed technical picture. A confirmed break higher should see further gains for the S&P 500 with the August 16 swing high at 4328 as the next significant target.

S&P 500 Daily Price Chart – December 2, 2022

image1.png
US 500 Mixed
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 2% -4% -2%
Weekly -10% 1% -3%
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Retail trader data shows 42.06% of traders are net-long with the ratio of traders short to long at 1.38 to 1.The number of traders net-long is 3.89% higher than yesterday and 5.03% lower from last week, while the number of traders net-short is 0.69% lower than yesterday and 1.41% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests US 500 prices may continue to rise. Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed US 500 trading bias.

The Nasdaq 100 chart also shows a dominant downtrend but this has been broken by the short-term uptrend, adding a slightly more positive bias to the chart. Again the outlook is mixed, this time due to the current price being way below the 200-day moving average – spot price at 11,883 vs. 200-dma at 12,527. For the Nasdaq’s sentiment to turn longer-term positive, both the 200-dma and the mid-August swing high at 13,719 will need to be reclaimed, and that looks like a very difficult proposition in the current market climate.

Nasdaq 100 Daily Price Chart – December 2, 2022

image2.png

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What is your view on US Indices – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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