Technical Analysis – US 100 cash index bears want a lot more than just a small correction
July 25, 2023 10:28 am
The US 100 index is edging higher today as a small correction is underway after the index registered its highest level of 15,931 since January 13, 2022. With a 32% rally in place since the March lows, the bulls are probably taking a breather at this juncture as they prepare for another upleg.
However, the momentum indicators are not sharing the bulls’ complacency. The Average Directional Movement Index (ADX) is close to returning below its 25-threshold and thus preparing to signal a range-trading market. More interestingly, the stochastic has broken below both its moving average and overbought territory and it is moving aggressively lower. This move points to a growing bearish tendency in the market that will become much stronger if the stochastic manages to make a lower low soon.
Should the bears feel more confident, they would try to stage a sell-off towards the busy 15,258-15,411 area. If successful, the next support area is expected at the March 13, 2023 upward sloping trendline, a tad above the 50-day simple moving average (SMA) at 14,830.
On the flip side, the bulls remain committed to making higher highs. They could try to keep the US 100 cash index above the 15,258-15,411 range and then target the September 6, 2021 high at 15,708. This level is probably not going to trouble them much and it will open the door for the recent high of 15,931, and eventually the all-time high of 16,767.
To sum up, US 100 index bulls remain firmly in control. The bulls are desperately trying to stage a sizeable pullback with the help of momentum indicators, but they need a stronger catalyst to achieve their target.
The US 100 index is edging higher today as a small correction is underway after the index registered its highest level of 15,931 since January 13, 2022. With a 32% rally in place since the March lows, the bulls are probably taking a breather at this juncture as they prepare for another upleg.
However, the momentum indicators are not sharing the bulls’ complacency. The Average Directional Movement Index (ADX) is close to returning below its 25-threshold and thus preparing to signal a range-trading market. More interestingly, the stochastic has broken below both its moving average and overbought territory and it is moving aggressively lower. This move points to a growing bearish tendency in the market that will become much stronger if the stochastic manages to make a lower low soon.
Should the bears feel more confident, they would try to stage a sell-off towards the busy 15,258-15,411 area. If successful, the next support area is expected at the March 13, 2023 upward sloping trendline, a tad above the 50-day simple moving average (SMA) at 14,830.
On the flip side, the bulls remain committed to making higher highs. They could try to keep the US 100 cash index above the 15,258-15,411 range and then target the September 6, 2021 high at 15,708. This level is probably not going to trouble them much and it will open the door for the recent high of 15,931, and eventually the all-time high of 16,767.
To sum up, US 100 index bulls remain firmly in control. The bulls are desperately trying to stage a sizeable pullback with the help of momentum indicators, but they need a stronger catalyst to achieve their target.
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