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S&P 500, Nasdaq 100 Latest – Bear Market Slump Continues

S&P 500, Nasdaq 100 Latest – Bear Market Slump Continues

Nick Cawley, Senior Strategist
What's on this page

S&P 500, Nasdaq 100 Prices, Charts, and Analysis

  • Bear market rallies continue to fail.
  • Fresh multi-month lows look increasingly likely.
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A heavy sell-off in US stock markets yesterday is being extended in early European turnover with all three major indices around 0.5% lower. Wednesday’s brutal sell-off (Nasdaq -4.7%, S&P -4%, DJIA -3.57%) was sparked by increased fears that the Fed is looking to stamp down hard on inflation via a series of interest rate hikes, leaving stock markets exposed to further losses. Recent quarterly results from heavyweight retailers Walmart and Target showed consumer spending is on the wane while production and transport costs continue to rise. Target (TGT) lost a quarter of its market value on Wednesday…

….while Walmart is down 18% after announcing its quarterly results early on Tuesday.

Barring the occasional bear market rally, US stock markets look set to move lower and test prior levels of support. In markets like these when investors are in the process of transitioning from one macro backdrop (excess liquidity/loose monetary policy) to another (tightening liquidity/tighter monetary policy) price action can become extremely volatile, producing out-sized losses or profits. Prices can, and will, move further than investors expect.

S&P 500, Nasdaq 100 Forecast – Stumbling on The Edge of a Cliff

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The S&P 500 chart remains heavy with Wednesday’s wash-out candle setting the stage for further losses. The March 25, 2021 swing low at 3,854 is under threat and if broken convincingly would leave the March 4, 2021 swing low at 3,723 as the next target. The chart continues to build a series of lower highs and lower lows.

S&P 500 Daily Price Chart – May 19, 2022

Retail trader data show 70.56% of traders are net-long with the ratio of traders long to short at 2.40 to 1. The number of traders net-long is 20.82% higher than yesterday and 2.51% higher from last week, while the number of traders net-short is 17.85% lower than yesterday and 14.48% higher from last week.

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

US 500 Bearish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 9% 3% 5%
Weekly -4% -9% -7%
What does it mean for price action?
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The Nasdaq 100 chart is looking increasingly negative with the break below the 11,810 level leaving 11,512 under threat. Below here there is an air pocket of around 600 points before the next level of support at 10,957.

Nasdaq 100 Daily Price Chart – May 19, 2022

What is your view onUS Equity Markets – 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.