Key Points
- The S&P 500 Fades from Resistance
- Small Caps Sustain the Most Damage on the Week
- The NASDAQ 100 Can’t Break Relative Resistance
- Ten Year Note Remains Under Pressure
- Commodities Are Bullish but Stalling
U.S. Equities
The S&P 500 closed lower on the week, unable to hold above the key 4,550 level. The index is dancing with the 40-week moving average but remains above the 10-week moving average. The 14-week RSI is moving lower and appears to be making another lower high, a sign that momentum continues to shift in favor of the bears. A close below the 10-week moving average will bring support at the 4,200 level into play.
After failing to break above the 40-week moving average, the S&P Small Cap 600 closed below the 10-week moving average as it underperformed on the week. Support near 1,220 is now in play, and a close below this level would signal that the bears are taking control of the trend. The 14-week RSI is on the verge of breaking below 40, which would lend momentum confirmation to the bearish price action.
The relative trend has broken support, putting the index into a position of underperformance.
The NASDAQ 100 tried once again to break above the 40-week moving average but failed. The index is holding the 10-week moving average for now, but another lower high from the 14-week RSI does not paint an encouraging picture from a momentum perspective. Support at 14,000 is important in the near term, while a break of 13,000 would put the bears in control of the trend.
The relative trend is fading from resistance.
U.S. Fixed Income
The 10-Year Note remained under pressure last week, falling to support near $120 and failing to provide a port in the storm as equities came under pressure. The Note remains below the declining 10 and 40-week moving averages. A break below $120 brings the 2018 lows near $118 into play.
The yield has broken above the 2.5% level, opening the door to a move toward 3%.
Global Equities
The Global Dow is doing battle with the 10 and 40-week moving averages after closing lower last week. The index remains in the consolidation that has been in place since last June, keeping the trend in a neutral position. The 14-week RSI confirms the neutral price trend as it trades in the middle of the range.
The relative trend remains below resistance in a choppy consolidation that has marked trading for more than a year.
Commodities
The Bloomberg Commodity Index remains in an uptrend, above the rising 10 and 40-week moving averages. However, the index has entered a stalling pattern after meeting resistance at the 140 level in early March. The 14-week RSI confirms the bullish trend by holding at overbought levels. Near-term weakness is likely to find support at the 10-week moving average, and there is price-based support at the 105 level.
Take-Aways
Stocks came under pressure last week, unable to maintain strength from the March lows. The rally is beginning to look more and more like a bear market bounce. Small Caps sustained the most damage, putting a key support level into play. The NASDAQ 100 is showing signs of relative weakness as the ratio fades from resistance. Treasuries remain under intense pressure, failing to provide a port in the storm in the face of equity weakness. Global stocks continue to trade in a consolidation, waiting for a clearer direction. Commodities maintain a bullish trend but are in a near-term stalling pattern.
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