The S&P 500 and Nasdaq Composite opened lower on the final trading day of August, both slipping below their 100-hour moving averages as U.S. Treasury yields climbed. The pullback trims some of the month's gains but leaves both indices still above their 200-hour moving averages, keeping the short-term technical picture neutral rather than bearish.
S&P 500 and Nasdaq give back August gains
The final trading day of the month also marks the start of a new trading week for the S&P 500 and Nasdaq Composite. At current levels, the S&P is up 2.54% for the month, while the Nasdaq has gained 3.69%. Both indices are trading lower today, however, giving back some of those gains.
Pressure comes amid concerns about rising U.S. interest rates following Fed Chair Kevin Warsh's hawkish comments at Jackson Hole on Friday. Increased tensions in the Middle East have also pushed oil prices higher. The U.S. 10-year yield is up 3.8 basis points at 4.76%, while the 30-year yield is up 5.2 basis points at 5.260%.
S&P 500 tests its 100-hour moving average
The S&P 500 is currently down about 31 points, or 0.41%, at 7678.26. The decline has taken the index below its 100-hour moving average at 7716.94 and toward the midpoint of the range between that level and the 200-hour moving average at 7632.08.
Moving below the 100-hour average has taken some bullish momentum out of the market. However, with the index still holding above the 200-hour average, buyers remain in play, leaving the short-term technical bias more neutral as traders wait for the next break.
A move back above the 100-hour average at 7716.94 would give buyers more control and shift the focus toward the all-time high at 7816.70. A break below the 200-hour average at 7632.08, conversely, would tilt the bias more firmly in the sellers' favor and open the door toward the rising 100-day moving average at 7441.52.
Nasdaq shows a similar pattern
A similar technical dynamic is playing out in the Nasdaq Composite. The index is currently down around 75 points at 26,328, taking it below its 100-hour moving average at 26,387.90. It remains, though, above its 200-hour moving average at 26,020.64.
As with the S&P, the move below the 100-hour average takes some bullishness out of the technical picture, but the 200-hour average continues to provide support and keeps buyers in the game. A move back above the 100-hour average at 26,387.90 would tilt the bias back in the buyers' favor. A break below the 200-hour average at 26,020.64, on the downside, would give sellers greater short-term control, with the 100-day moving average at 25,753.74 becoming the next key target.
Source: Investinglive
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