Technical Analysis – US 30 cash index at inflection point
June 8, 2023 8:25 am
The US 30 cash index is hovering around 33,518 and conforming to the recent series of lower highs. On the downside, the October 13, 2023 upward sloping trendline appears to be acting as a strong support. The US 30 index has essentially entered a range-trading phase as market participants are trying to figure out their next move, especially as other US stock indices rally aggressively.
With the Average Directional Movement Index (ADX) confirming this trendless market and the RSI trading almost at its 50-threshold, the onus falls on the stochastic oscillator to give some sort of a hint. This indicator has just entered its overbought territory, where it can stay for a while before signaling the next possible US 30 index move.
Should the bulls decide to regain market control and retest the August 16, 2022 high at 34,280, they would firstly have to break the 33,518-33,754 area populated by the 61.8% Fibonacci retracement of the January 5, 2022 – October 3, 2022 downtrend, and the October 1, 2021 low. Even higher, the twin December 13, 2022 and May 10, 2021 highs at 34,930 and 35,091 respectively would clearly test the bulls’ resolve.
On the other hand, the bears would be keen on a break of the 33,317-33,483 area defined by the 50- and 100-day simple moving averages (SMAs). They would then come up against the October 13, 2023 upward sloping trendline, which stands a tad above the busy 33,767-33,028 area that is set by the June 21, 2021 low, the 50% Fibonacci retracement and the 200-day SMA respectively.
To sum up, the repeated failures at 34,280 appear to have confused the US 30 bulls. The current range-trading mode is an opportunity for them to formulate their strategy, especially as the path of least resistance appears to favour the bears.
The US 30 cash index is hovering around 33,518 and conforming to the recent series of lower highs. On the downside, the October 13, 2023 upward sloping trendline appears to be acting as a strong support. The US 30 index has essentially entered a range-trading phase as market participants are trying to figure out their next move, especially as other US stock indices rally aggressively.
With the Average Directional Movement Index (ADX) confirming this trendless market and the RSI trading almost at its 50-threshold, the onus falls on the stochastic oscillator to give some sort of a hint. This indicator has just entered its overbought territory, where it can stay for a while before signaling the next possible US 30 index move.
Should the bulls decide to regain market control and retest the August 16, 2022 high at 34,280, they would firstly have to break the 33,518-33,754 area populated by the 61.8% Fibonacci retracement of the January 5, 2022 – October 3, 2022 downtrend, and the October 1, 2021 low. Even higher, the twin December 13, 2022 and May 10, 2021 highs at 34,930 and 35,091 respectively would clearly test the bulls’ resolve.
On the other hand, the bears would be keen on a break of the 33,317-33,483 area defined by the 50- and 100-day simple moving averages (SMAs). They would then come up against the October 13, 2023 upward sloping trendline, which stands a tad above the busy 33,767-33,028 area that is set by the June 21, 2021 low, the 50% Fibonacci retracement and the 200-day SMA respectively.
To sum up, the repeated failures at 34,280 appear to have confused the US 30 bulls. The current range-trading mode is an opportunity for them to formulate their strategy, especially as the path of least resistance appears to favour the bears.
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