US indices hit by profit-taking

…But the trend remained bullish ahead of key earnings and central bank meetings

Uptrend 2

…But the trend remained bullish ahead of key earnings and central bank meetings

US indices struggled to shake off the early weakness as European markets closed for the day. However, “profit-taking” was written all over the markets, rather than anything significant. For, there was no major catalysts behind today’s sell-off. Indeed, the selling pressure was relatively mild, and the major indices holding within recent ranges at the time of writing. So, despite the weakness, I wouldn’t rule out the possibility for a late day rally, like we have seen on numerous occasions in recent weeks.

With investors keeping a close eye on the big macro events taking place later this week, as well as the key technology earnings results, traders were keen to figure out whether key support levels would hold as the major indices tested some interesting technical levels.

The tech-heavy Nasdaq 100 had sold off the most, down as much as 1.8% earlier. But it remained to be seen whether the weakness would turn into a proper sell-off as the index tested key support and the 200-day average around 11920 area. A bounce here would confirm the bulls are in control, which may then inspire a breakout above the December high of 12215.


However, a daily close back below the 200-day would be a sign of weakness. Even so, we would still have to see a bit more of confirmation before declaring the bull trend is over. For now, we are giving the bulls the benefit of the doubt.

The Nasdaq will be in focus as we will have the latest earnings results from Apple, Amazon, Google owner Alphabet, and Facebook parent company Meta, among others.

Meanwhile the S&P was showing similar price action to the Nasdaq, but it too was trying to bounce off key support around 4022. This is where the index had found resistance earlier last week, before rallying in the latter half of the week.

But with the long-term bearish trend line broken and the 200-day average reclaimed, the bulls would remain happy for as long as the S&P doesn’t now create a new lower low beneath that 200-day average again.

US 500

The Russell looked the most interesting one to me as the bulls try to establish their control by causing a breakout above key resistance area circa 1900. So far, they have been unable to do so, but the way the index has been creeping higher of later, it wouldn’t surprise. Importantly, a breakout above 1900 would invalidate the bearish head and shoulders pattern, which in itself would be another bullish development.


So, despite today’s weakness, the technical picture is still looing constructive for the major indices. It is all about those central bank meetings and key tech earnings. For as long as the earnings are not too bad and/or the Fed and ECB are not too hawkish, that should keep the bulls happy.



How to trade with

Follow these easy steps to start trading with today:

  1. Open a account, or log-in if you’re already a customer.
  2. Search for the pair you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.



Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account