Technical Analysis – US 100 cash index bears appear to be thirsty still
August 14, 2023 12:25 pm
The US 100 index is edging higher but the bearish pressure following the July 19, 2023 peak of 15,931 remains potent. It looks like the bears are determined to register the first sizeable pullback since the March 2023 events, in a desperate attempt to recoup part of their significant recent losses.
Obviously, the momentum indicators have taken notice of this bearish reaction. The Average Directional Movement Index (ADX) has broken above its 25-threshold, thus signalling a muted bearish trend in the market, and the RSI is trading consistently below its 50-midpoint for the first time since March 2023. More importantly, the stochastic oscillator has dropped inside its oversold territory, holding a good gap from its moving average. It can stay at this area for a considerable period of time before the market starts to question the viability of the current downleg.
Should the bears remain confident, they would try to push the US 100 cash index off towards the busy 14,282-14,382 area. This range is populated by the October 4, 2021 low, the 61.8% Fibonacci retracement level of the November 22, 2021 – October 13, 2022 downtrend, and the 100-day simple moving average (SMA). If successful in breaking this region, the next support area is expected at the April 29, 2021 high at 14,075.
On the flip side, the bulls remain committed to making a higher high and they are probably not enjoying the current correction. They appear keen on pushing the US 100 cash index above the 15,191-15,411 range and then target the September 6, 2021 high at 15,708. This level is probably not going to trouble them much, and it would open the door for the recent high of 15,931.
To sum up, US 100 index bears are finally staging a pullback, supported by the momentum indicators. However, the medium-term trend remains bullish and hence the bulls are probably preparing their response.
The US 100 index is edging higher but the bearish pressure following the July 19, 2023 peak of 15,931 remains potent. It looks like the bears are determined to register the first sizeable pullback since the March 2023 events, in a desperate attempt to recoup part of their significant recent losses.
Obviously, the momentum indicators have taken notice of this bearish reaction. The Average Directional Movement Index (ADX) has broken above its 25-threshold, thus signalling a muted bearish trend in the market, and the RSI is trading consistently below its 50-midpoint for the first time since March 2023. More importantly, the stochastic oscillator has dropped inside its oversold territory, holding a good gap from its moving average. It can stay at this area for a considerable period of time before the market starts to question the viability of the current downleg.
Should the bears remain confident, they would try to push the US 100 cash index off towards the busy 14,282-14,382 area. This range is populated by the October 4, 2021 low, the 61.8% Fibonacci retracement level of the November 22, 2021 – October 13, 2022 downtrend, and the 100-day simple moving average (SMA). If successful in breaking this region, the next support area is expected at the April 29, 2021 high at 14,075.
On the flip side, the bulls remain committed to making a higher high and they are probably not enjoying the current correction. They appear keen on pushing the US 100 cash index above the 15,191-15,411 range and then target the September 6, 2021 high at 15,708. This level is probably not going to trouble them much, and it would open the door for the recent high of 15,931.
To sum up, US 100 index bears are finally staging a pullback, supported by the momentum indicators. However, the medium-term trend remains bullish and hence the bulls are probably preparing their response.
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