S&P 500 and Nasdaq 100 Proximity to New Heights on the Horizon, Indicating Positive Outlook
Table of contents
The S&P 500 is up 2.26% for the month so far
/ES S&P 500 price technical analysis: daily chart (September 2023 to March 2024)
/NQ Nasdaq 100 price technical analysis: daily chart (September 2023 to March 2024)
/RTY Russell 2000 price technical analysis: daily chart (September 2023 to March 2024)
1. The S&P 500 is up 2.26% for the month so far
The S&P 500 enters the week having rallied 17 of the past 21 weeks.
The Nasdaq 100 is just days removed from all-time highs and may be consolidating in an ascending triangle.
The technical evidence needed to suggest that a top has been carved out in U.S. equity indexes was never achieved.
2. $E-mini S&P 500 - main 2406(ESmain)$ price technical analysis: daily chart (September 2023 to March 2024)
/ESM4
Just over a week ago, the $S&P 500(.SPX)$ rebounded at critical support in the form of the uptrend from the October 2023 and February 2024 swing lows as well as the daily 21-day EMA (one-month moving average).
As noted at the time, “in a bull market, you buy at support,” and the rebound from said support reinforces the notion that the bull market is still very much intact. The recent swing high near 5140 may prove near-term support this week; below, the daily 21-day EMA comes in at 5209.50. The limited volatility profile for /ESM4 (IV Index: 12.8%; IV Rank: 10.9) suggests that long ATM call spreads are more appropriate than short ATM put spreads for expressing a bullish bias.
3.$E-mini Nasdaq 100 - main 2406(NQmain)$ price technical analysis: daily chart (September 2023 to March 2024)
/NQM4
Price action in the $NASDAQ 100(NDX)$ over the past month has ultimately produced a sideways range, potentially serving as a correction in time rather than price.
If so, the uptrend from the October 2023 and March 2024 lows may be morphing into an ascending triangle; contextually, this is a continuation pattern that suggests new all-time highs may emerge soon. The 700-point range suggests a target near 19400.
Momentum is now bullish: with /NQM4 above its daily 5-, 13-, and 21-day EMA cloud, which is in bullish sequential order. Slow stochastics are in overbought territory; and the moving average convergence/divergence (MACD) is trending higher above its signal line. The limited volatility profile for /NQM4 (IV index: 17.5%; IV rank: 19.2) suggests that long ATM call spreads are more appropriate than short ATM put spreads for expressing a bullish bias.
4. $E-mini Russell 2000 - main 2406(RTYmain)$ price technical analysis: daily chart (September 2023 to March 2024)
/RTYM4
In the prior update, we observed that “a move above 2090 next week would negate the burgeoning bearish breakout.”
Indeed, the Russell 2000 was able to clear this hurdle, resetting the technical chart to an ascending triangle with another test of resistance. While it has thus far not succeeded, there is no such thing as a “quintuple top”; the more often resistance (or support) is tested, the more likely it is to break. The relatively robust volatility profile for /RTYM4 (IV index: 20.8%; IV rank: 42) suggests that short ATM put spreads are more appropriate than long ATM call spreads for expressing a bullish bias.
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