S&P 500 and Nasdaq 100 Analysis – June 25, 2018

The US indices are set to start the week with losses as trade tensions escalate. President Trump tweeted on Sunday that trading partners should remove their “trade barriers and tariffs or be met with more than reciprocity by the U.S.”. This may have been aimed at the EU which began implementing tariffs on US imports. Furthermore, the US is also expected to place curbs on Chinese investment in US technology firms. The measures are set to be announced by the end of the week and are aimed at blocking the “Made in China 2025” policy which aims at making China a global leader in technology. The Nasdaq could come under pressure as tech companies are dragged into the trade dispute.

S&P 500

On the 4-hourly chart, the S&P500 (SPX) turned lower from the zone of resistance between 2785-2800 and is attempting to break the 2740 horizontal support level and 200MA. A break of this level could see more downside to support at 2715 and then 2703 near the 38.2% retracement from the March lows. If the 2740 support holds, a bullish reversal will find resistance at 2760 and 2785.

Nasdaq 100

On the 4-hourly chart, the Nasdaq 100 (NDX) turned lower after making new all time highs has broken a bearish ascending wedge. Near term support is at 7130, but a break of the 23.6% retracement at 7100 could lead to a deeper correction towards 7000 and then 6950. However, a reversal back above the trend line at 7210 would negate the outlook.