S&P 500 and Nasdaq 100 Face Key Tests Ahead of Earnings
S&P 500 and Nasdaq 100 Face Key Tests Ahead of Earnings
The exchanges are testing resistance as earnings from the tech giants loom. Will they break higher or stall?
- Both the S&P 500 (/ESM5) and Nasdaq 100 (/NQM5) have traded to the topside of their post-Liberation Day trading ranges.
- The Russell 2000 (/RTYM5) is failing to clear an important threshold of technical resistance that has kept gains capped over the past three weeks.
- It’s a big week for earnings and the Nasdaq 100: Microsoft (MSFT), Meta Platforms (META), Amazon (AMZN), and Apple (AAPL) will report later this week.
April has been nothing if not exciting from the trading perspective. A surge in volatility around the April 2 “Liberation Day” tariffs helped produce some of the largest single-day point moves in the S&P 500’s history: April 9 (+474.13) clocks in as No. 1 among largest point gains; April 4 (-322.44), April 3 (-274.45), and April 10 (-188.85) rank as the #2, #3, and #6 largest single-day point losses ever.
The end of April and start of May bring about a slew of major earnings releases—Microsoft (MSFT), Meta (META), Apple (AAPL) and Amazon (AMZN)—and significant macroeconomic events (nonfarm payrolls) that may help distract traders from the tariff talk that is otherwise dominating price action. A ‘humped’ VIX term structure (IVs lower in the near-term, rise towards mid-term, then decrease again longer-term) suggests markets are not out of the woods yet.
/ES S&P 500 Price Technical Analysis: Daily Chart (October 2024 to April 2025)
The S&P 500 (/ESM5) is struggling to break the downtrend from the February, March and April swing highs, losing steam around 5500/50 for a third session. This area is likewise where /ESM5 found support in March ahead of Liberation Day, a technical ‘line in the sand’ that has defined the topside of the wide trading range over the past month. Failure here, back into the downtrend, would suggest bulls have run out of ammunition.
That said, improved momentum may give dip buyers a technical reason to try to pick up the pieces early in the week. /ESM5 remains above its daily 5-, 13- and 21-EMAs, and the EMA cloud is in bullish sequential order. MACD is on the verge of crossing above its signal line, while Slow Stochastics are nestled in overbought territory—neither of which are signs of a bear market. The path of least resistance would appear to be chop, barring a decisive breakout above 5550.
/NQ Nasdaq 100 Price Technical Analysis: Daily Chart (October 2024 to April 2025)
Like /ESM5, the Nasdaq 100 (/NQM5) is finding trouble around the lows carved out in March, which have since become resistance in post-Liberation Day trading. Similar to /ESM5, /NQM5 likewise has an improved momentum profile (EMA cloud, MACD and slow stochastics) that suggests a corner-of-sorts has been turned. Failure below 19000 would negate budding bullish technical sentiment. Close to the midpoint of the 2025 trading range, the prudent decision may ultimately be to stay directionally neutral in the short-term.
/RTY Russell 2000 Price Technical Analysis: Daily Chart (December 2024 to April 2025)
The Russell 2000 (/RTYM5) tells a familiar story: the downtrend from the yearly highs is being pressured but not yet hurdled; the March swing lows that preceded
Liberation Day are serving as resistance; yet momentum appears to be turning the corner in a more constructive manner. A closer look at today’s candlestick suggests that with a bit more weakness in the close, a bearish outside engulfing bar (or bearish key reversal) would be established, suggesting a near-term top.
That would be accomplished below 1937.8, which would likewise see /RTYM5 close below both its daily 5- and 21-EMAs.
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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