Technicals | 10:50 AM
Tony Sycamore, Market Analyst, IG shares his technical views on the Nasdaq, ASX200, gold and crude oil.
Earlier today, Tony Sycamore, Market Analyst, IG updated his views and thoughts on financial markets, including the technical analysis updates below.
All material has been re-published with permission and does not by association represent FNArena’s views (we have none, we simply report).
First Up, S&P500
(We are using the SPX chart today as the NDX chart on Trading View has a bad closing price today).
Post the S&P500s surge higher on the 12th of May, we have been working with view that the rally from the 21st of April 5101 low was a Wave iii (Elliott Wave) that should be followed by a Wave iv pullback.
The rebound in late June from our key 5950/20ish support zone opened the way for the S&P500 (Wave iii) to push to new highs.
However, with the Nasdaq now approaching critical resistance and both the Nasdaq100 and the S&P500 forming weekly loss of momentum candles last week, it is time to refresh the levels which might indicate a Wave iv pullback is underway.
Specifically, a sustained break of short-term support at 6200/6180 would be an initial indication that Wave iii is complete and that a Wave iv pullback is underway.
The initial target for the Wave iv is a band of support 6150/30 area coming from previous highs with a sustained break of this level opening the way for a deeper Wave iv decline towards support at 5970/50ish.
ASX200
The ASX200’s rebound from the late June 8421.1 low has resulted in the ASX200 getting to within seven points of its 8639.1 record high.
The weakness in the overnight session raises the possibility that yesterday’s 8632.1 high and June’s 8639.1 high may form a double top, a possibility which would greatly increase if the ASX200 were to lose a band of support 8530/10 area.
In this event, it would warn of a deeper pullback initially to 8420/00 with a sustained break below here indicating a move towards the 200-day moving average at 8250ish is underway.
Crude Oil
WTI Crude Oil finished lower overnight at US$66.75 (-0.12%) despite yesterday’s better-than-expected Chinese 2Q GDP data that was boosted by fiscal stimulus and the front loading of production and exports to beat US tariffs.
As these impacts fade, Chinese growth is expected to fall below 4.5% in the second half of this year; a fall which will weigh on Chinese demand for oil.
Technically, the rejection from the US$69.65 high this week puts the focus back on support at US$65/US$/64.
Crude oil needs to remain above here, to keep hopes intact for a bounce back into the low US$70s.
Gold
Gold finished lower overnight at US$3325 (-0.56%), undercut by further gains for the USD and yields overnight.
Gold needs to hold above trend line support at around US$3300/US$3290, to keep the uptrend intact and to remain on track to retest the US$3500 record high.
Otherwise, it risks a deeper setback toward US$3120/US$3130ish.
Technical limitations
If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.
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