Nasdaq 100, S&P 500, Russell 2000 Mauled as Risk-Off Sentiment Dominates Price Action
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NASDAQ 100, S&P 500, Russell 2000: Prices, Charts ,and Analysis
- Equity markets testing fresh multi-week lows.
- Market heavyweight’s Apple, Microsoft, and Tesla all announce earnings this week.
Global risk markets are under heavy selling pressure as the week starts with equities hit across the board, while cryptocurrencies are again registering heavy losses. The markets have been in a risk-off mood for most of January and losses are now accelerating as we head towards the FOMC decision on Wednesday. The markets are currently pricing-in an excessively hawkish Federal Reserve – 4+ rate hikes, end of quantitative easing, the start of quantitative tightening – and this coupled with Russian warmongering against Ukraine has hit risk sentiment hard. Russia is said to have 100,000 troops situated on the border with Ukraine, fueling invasion fears, with the US now suggesting that it will send up to 50,000 troops as well as aircraft and warships to Eastern Europe in an effort to stop Russia from making any incursion.
A look at three American indices shows the depth of the recent sell-off. This week’s US earnings season may also add some extra volatility with Apple (AAPL), Microsoft (MSFT), Tesla (TSLA), and Visa (V) among a raft of heavyweight companies announcing their Q4 results.
The Nasdaq 100 is down just under 15% from its November 22 high and last week convincingly broke the dominant multi-month uptrend. The indices now rests on a prior swing low around 14,373 and a break below here opens the way to much deeper losses. The CCI indicator is deep in oversold territory and this may temper the current move lower.
NASDAQ 100 Daily Price Chart – January 24, 2022
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The S&P 500 is also making fresh multi-week lows with the indices down nearly 10% since the January 4 all-time high. The two largest constituents of the S&P 500, Apple (6.2% weighting) and Microsoft (5.9% weighting) release their earnings this week and any miss or disappointment could send the indices lower still. The next level of technical support for the US 500 is seen around 4,271.
S&P 500 Daily Price Chart - January 24, 2022
The Russell 2000, a small-cap market proxy is down nearly 20% since earlyNovember and heading into a technical bear market. The technical outlook remains weak with a 50-day sma/20- day sma ‘death cross’ formed on January 7. The indices has convincingly broken below a group of supportive prior lows and is now heading towards a zone between 1,884 and 1,924.
Russell 200 Daily Price Chart – January 24, 2022
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