The U.S. stock earnings season has started, and a series of large banks will announce their latest earnings data within a few days; the S&P 500 is in a technical struggle; for now, the outlook for the Nasdaq 100 remains neutral.
U.S. earnings season begins
The earnings season for US stocks has started, and a series of important banks will announce their latest earnings data within a few days. Among them, Bank of America (BAC), Citigroup (C), JPMorgan Chase (JPM), Wells Fargo (WFC) and the world’s largest fund management company BlackRock (BLK) will all announce the latest financial report data before the US stock market. . While recent macro fundamentals and data have been the driving force for the market, the latest earnings releases from U.S. companies in the next month will shed light on the health of the U.S. economy.
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S&P 500 Index Trend Analysis
The S&P 500 continues to respect the downtrend line extending from the January 2022 high, which the index has hit several times before, but has all recorded periodic choppy highs and reversed downwards. Looking at the daily chart, the S&P 500’s streak of consistently lower lows over the past year may be over. If there is no clear shift in market sentiment, the chances of the S&P 500 revisiting its mid-October low of 3502 are slim to none. Currently, the S&P 500 is in a duel with the 200-day moving average and is trading below the psychologically important 4000 level. While the S&P 500 chart looks neutral or even slightly bullish, the index first needs to break through these levels and consolidate the breakout above before further developments are possible. The upcoming earnings season for U.S. stocks is key.
S&P 500 index daily chart
Source: Tradingview
IG Client Sentiment Indicator
The IG client sentiment indicator shows that 46.16% of retail investors are net long on the S&P 500, and the ratio of short to long positions is 1.17:1. The number of net long positions decreased by 0.68% compared to yesterday, and decreased by 23.94% from last week; while the number of net short positions increased by 4.49% compared to yesterday, and increased by 35.30% from last week.
The IG client sentiment indicator is often used as a contrarian indicator, and retail investors are bearish, which means that the S & P 500 index is expected to continue to rise. The number of net short positions has increased compared with yesterday and last week. Combined with the current sentiment and recent changes, the IG client sentiment indicator has released a strong bullish signal for the S & P 500 index.
Nasdaq 100 trend analysis
Even though the Nasdaq 100 has once again broken out of a major downtrend, the technical outlook for the index continues to be neutral. Previously, the Nasdaq 100 had broken above this trend line twice, but ultimately failed to hold above this trend line. Although the Nasdaq 100 is currently holding a series of lows near the 10800 line, I do not rule out the possibility of the index revisiting these lows, especially if the large technology companies disclose disappointing earnings data. Microsoft (Microsoft, accounting for 11.8%), Apple (Apple, accounting for 11.6%) and Amazon (Amazon, accounting for 6.5%) together account for about 30% of the market capitalization of the Nasdaq 100, and we need to pay close attention to the financial performance of these three giants . (Translated by Lisa written by Nick Cawley)
Nasdaq 100 trend daily chart
Source: Tradingview
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