S&P 500 weekly update: Sentiments unwinding from previous oversold conditions
The CNN Fear and Greed Index has reversed alongside the risk rally, while market breadth picked up from previous extreme oversold levels.
S&P 500 weekly update
Wall Street staged its best week in nearly a year, as a series of softer economic data were cheered for supporting a more balanced Federal Reserve (Fed)’s rate outlook. The positive market reaction to the soft US jobs data last Friday suggests that market participants are willing to take ‘bad news’ for the economy in stride, as long as the downside surprise is not too significant to drive out soft landing hopes. The S&P 500 was up close to 5% for the week, with greater flows into rate-sensitive sectors as rate hikes into 2024 are being priced out, just as we tread into the more favourable seasonal period of the year (Nov-Dec).
The CNN Fear and Greed Index has reversed alongside the risk rally, but remains in “fear” territory for the sixth straight week, which may provide additional room for previous bearish sentiments to unwind further. Similarly, the index’s market breath (% of stocks above their respective 100-day and 200-day moving average (MA)) have clearly picked up from previous extreme oversold levels, but still stand at a distance from more neutral levels. The latest Commodity Futures Trading Commission (CFTC) data also revealed that large speculators have fully unwound their S&P 500 net-short positioning and has reversed to net-long for the second straight week.
Technical analysis: S&P 500 heading to retest Ichimoku cloud resistance
Following a brief dip below the 200-day MA line in late-October this year, the S&P 500 has reclaimed the key MA line last week and are now heading to retest its Ichimoku cloud resistance on the daily chart. Recent upside has also brought the index back within its ascending channel pattern in place since its October 2022 bottom. Ahead, its recent October 2023 high at the 4,400 level may be on watch next, with any successful move above the 4,400 level potentially paving the way for the index to set its sight on its year-to-date high at the 4,600 level.
Technical analysis: Nasdaq 100 index back at upper channel resistance
Having traded in a falling channel pattern since July this year, the Nasdaq 100 index has managed to bounce off the lower channel trendline support around the 14,200 level last week. A bullish crossover was displayed on its daily moving average convergence/divergence (MACD) for now, as a sign of reversing momentum to the upside. One may still point towards the presence of a bullish flag formation in place, with immediate resistance to overcome at the near-term upper channel trendline at the 15,200 level.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.