A worrying time for longer-term investors as we approach that time of the year when the old adage of sell in May and go away comes to mind as all three of the major US indices struggle to maintain the longer-term bullish momentum. Of the three – Dow, Nasdaq, and the S&P500 they all exhibit similar technical issues, however, it is the NQ Emini daily chart that is the focus here, and the problematical level which sits at the psychological 14,000 level which continues to present a formidable barrier. During April this has been tested several times, more recently on both Monday and yesterday, and was the stumbling block earlier in the month which saw the index sell off sharply only for it to recover. What is perhaps of more concern is the lack of buying interest with volume falling over the last few days on those which closed higher. Note the last two green candles, and whilst price and volume are in agreement, the narrowing of the spread on the second day signals a weakness which has duly been delivered, yesterday and thus far today.

Despite the old adage, I believe the medium-term outlook is still bullish for risk assets and not least for commodities particularly copper, softs, and lumber. For the NQ in particular it is a question of breaching and holding above the 14,000 resistance level, and once through a strong platform of support will be in place to propel the index higher.

(Click on image to enlarge)