Technical Analysis – US 30 cash index close to a new 2023 high but picture less than rosy
July 13, 2023 2:29 pm
The US 30 cash index is edging higher again today, but a triple-top pattern appears to be forming. This type of structure is not uncommon in this market, but it clearly casts a shadow on the current rally. A potential break of the 33,605 neckline would brand this structure as valid with its 32,700 target becoming active.
The negative news for the bulls appears to continue as the momentum indicators are not fully endorsing the current upleg. More specifically, the RSI is above its 50-midpoint, but it appears to have peaked. Similarly, the Average Directional Movement Index (ADX) remains stuck below its 25-threshold and thus pointing to a continued range-trading phase. More interestingly, the stochastic oscillator is currently battling with its moving average (MA). Its next move will probably send a strong signal of the likely direction of the next leg in the US 30 cash index.
Should the bulls decide to ignore the negative signals, they would try to record a new 2023 high above the recent 34,583 peak. Even higher, the December 13, 2022 high at 34,930 is unlikely to trouble the bulls much. The same, though, cannot be said for the 35,091-35,496 area that is defined by the April 21, 2022 high and May 10, 2021 high respectively.
On the flip side, the bears are preparing to take advantage of the tentative bearish signals. They appear to be keen on clearing the August 16, 2022 high at 34,280 and then staging a move towards the neckline of the aforementioned pattern and the busy 33,402-33,754 range. This is a key area for short-term market sentiment and, if successfully broken, it could open the door for a move towards the 32,700 range.
To sum up, US 30 index bulls are probably enjoying the current upleg, but they should not ignore the bearish pressure manifesting on the back of the developing triple-top pattern.
The US 30 cash index is edging higher again today, but a triple-top pattern appears to be forming. This type of structure is not uncommon in this market, but it clearly casts a shadow on the current rally. A potential break of the 33,605 neckline would brand this structure as valid with its 32,700 target becoming active.
The negative news for the bulls appears to continue as the momentum indicators are not fully endorsing the current upleg. More specifically, the RSI is above its 50-midpoint, but it appears to have peaked. Similarly, the Average Directional Movement Index (ADX) remains stuck below its 25-threshold and thus pointing to a continued range-trading phase. More interestingly, the stochastic oscillator is currently battling with its moving average (MA). Its next move will probably send a strong signal of the likely direction of the next leg in the US 30 cash index.
Should the bulls decide to ignore the negative signals, they would try to record a new 2023 high above the recent 34,583 peak. Even higher, the December 13, 2022 high at 34,930 is unlikely to trouble the bulls much. The same, though, cannot be said for the 35,091-35,496 area that is defined by the April 21, 2022 high and May 10, 2021 high respectively.
On the flip side, the bears are preparing to take advantage of the tentative bearish signals. They appear to be keen on clearing the August 16, 2022 high at 34,280 and then staging a move towards the neckline of the aforementioned pattern and the busy 33,402-33,754 range. This is a key area for short-term market sentiment and, if successfully broken, it could open the door for a move towards the 32,700 range.
To sum up, US 30 index bulls are probably enjoying the current upleg, but they should not ignore the bearish pressure manifesting on the back of the developing triple-top pattern.
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