Dow Jones, S&P 500, Nasdaq 100 Outlook:
Equities Remain Under Pressure
After a grueling week for US equity indices[1], bulls were unable to maintain the uptrend which has persisted despite the looming global economic crunch. After the Nasdaq[2] and S&P 500[3] reached all-time highs in the beginning of September, the much anticipated pullback soon came into play, resulting in two consecutive weeks of losses. From a historical perspective, September is known to produce high volatility and with that being said, for the duration of the month, price action[4] may be of particular interest as the US Presidential Election nears.
Fundamentals will also likely play a role as both uncertainty regarding further stimulus measures and the upcoming elections are additional factors to consider.
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Nasdaq 100 Technical Analysis
This week, tech stocks plummeted; resulting in a pullback to a key level of support[6], formed by the 50% retracement of the June low to the September high. This comes after the occurrence of a MACD crossover[7] from above the zero-line on 3 September, indicating that the trend could reverse in the short-term.
Chart prepared by Tammy Da Costa[9], IG
Meanwhile, the 50% retracement level, combined with the psychological level[10] of 11000 kept bears at bay, highlighting that bullish continuation[11] could not yet be ruled out, with the 38.2% retracement level helping to hold as resistance[12] at 11287.1. A break above this level may see price action gain further momentum, with the psychological level of 11500 being a next
