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S&P 500, Nasdaq 100 Retain Bullish Technical Postures

By:Christopher Vecchio - CFA

The Nasdaq 100 is up 10.58% month-to-date

  • U.S. stock markets are trying for their fifth straight week of gains.
  • The S&P 500 (/ESZ3) is hovering around the Sept.15 high (bearish key reversal), while the Nasdaq 100 (/NQZ3) is just below its yearly high.
  • The Russell 2000 (/RTYZ3) may be looking at a bottom in the form of an inverse head and shoulders pattern.

Fig. 1: Year-to-date price percent change chart for /ES, /NQ, /RTY, and /YM
Fig. 1: Year-to-date price percent change chart for /ES, /NQ, /RTY, and /YM

On the other side of the holiday week, U.S. equity markets have started off with a relative whimper: no major index has gained nor lost more than +/-0.3% at the time of writing.

Nevertheless, technical structures across the big four remain bullish on a momentum basis, and with measures of volatility continues to stay depressed, quiet earnings and macroeconomic calendars offer few obstacles to derail markets from their current trajectory. A looming announcement from OPEC+ and a Friday speech by Fed Chair Jerome Powell represent the most tangible risks, should any surprises materialize.

/ES S&P 500 price technical analysis: daily chart (September 2022 to November 2023)


Little has changed for the S&P 500 (/ESZ3) over the past week: momentum is still bullish. /ESZ3 is above its daily 5-, 13-, and 21-day exponential moving average (EMA) envelope, which remains in bullish sequential order; it has not closed below its daily 5-EMA (one-week moving average) since Oct. 31.

Slow stochastics persist in overbought territory and moving average convergence divergence MACD continues to trend upwards above their signal line. The index is levitating around 4566, the Sept. 15 high of the bearish engulfing bar/key reversal. Once clear, as noted last week, “little stands in the way (from a technical perspective) of a return to the yearly high at 4685.25.”

/NQ Nasdaq 100 price technical analysis: daily chart (December 2022 to November 2023)


Nothing has changed for the Nasdaq 100 (/NQZ3) since before the Thanksgiving holiday, when the continuous contract, /NQ, and the ETF, QQQ, reclaimed their yearly high set in July. /NQZ3 is not quite there yet. Regardless, momentum is still firmly bullish: /NQZ3 remains above its daily EMA envelope, which is in bullish sequential order; Slow Stochastics are holding in overbought territory, and MACD continues to trend higher above its signal line. As has been the observation for several weeks, “the bullish falling wedge is the primary technical interpretation for the foreseeable future, targeting a return to the yearly high at 16264.25.”

/RTY Russell 2000 price technical analysis: daily chart (April 2023 to November 2023)


The Russell 2000 (/RTYZ3) has not made much progress or regression in recent days, holding the breakout above the descending trendline from the August and September highs as well as the neckline of an inverse head and shoulders pattern. Familiar resistance around 1820/1850 (which has been both support and resistance since the regional banking crisis in March) remains, the improvement in the momentum profile coupled with the bottoming pattern keeps /RTYZ3 on favorable footing for the near future.

Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx

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