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Technical Analysis – US 100 cash index edges lower; key levels ahead

- Achilleas Georgolopoulos

  • US 100 cash index remains under bearish pressure

  • Prepares to test the September lows as geopolitics dictate sentiment

  • Momentum indicators point to a continuation of the current move

The US 100 cash index is trying to record its fifth consecutive red candle for the first time since April. The bears continue to take advantage of the current bearish sentiment that is fuelled by unfolding geopolitical developments. Their main target appears to be a lower low, below the recent 14,430 low, in order to keep the developing series of lower lows and lower highs intact.

The bears are now also enjoying the support of the momentum indicators. The Average Directional Movement Index (ADX) is edging higher, above its 25-threshold, revealing a weak bearish trend in the market. Similarly, the RSI has again dipped below its midpoint, but it does not appear ready to test its recent lows. More importantly, the stochastic oscillator is edging lower in a vertical fashion towards its oversold territory, building a good gap from its moving average and sending a bearish signal.

With their confidence sky-high, the bears are preparing to test the busy 14,346-14,382 area, which is populated by the October 4, 2021 low and the 61.8% Fibonacci retracement level of the November 22, 2021 – October 13, 2022 downtrend. If successful, they could then set sail for the 13,957-14,075 region that is defined by the April 29, 2021 high and 200-day simple moving average (SMA).

On the flip side, the bulls are trying to stop the current downleg. They could try to defend the 14,346-14,382 area and then stage a rally towards the 15,031-15,112 region set by the 50- and 100-day SMAs. Even higher, they could test the resistance set by the July 19, 2023 descending trendline and the busy 15,257-15,411 area. 

To sum up, the US 100 cash index bears are firmly in control of the market, taking advantage of the fragile market sentiment and targeting another lower low.

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