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  • US 100 index is in red today, testing the support set by a key trendline
  • It remains a tad below its all-time high as the market looks for new bullish catalysts
  • Stochastic oscillator is trying to send a bearish message

The US 100 cash index is lower today, testing the support set by the October 26, 2023 ascending trendline but remaining very close to its February 12, 2024 high of 18,041. The journey higher has almost been a straight line, raising questions on the soundness of this upleg and potentially opening the door for a sizeable correction if the bears manage to take over control of the US 100 index.

Such a possibility is not really that far-fetched considering the current stance of the momentum indicators. More specifically, the stochastic oscillator has broken below both its moving average and overbought territory. Should this move pick up pace, it could be seen as a strong bearish signal. Additionally, the RSI could be possibly preparing for a decent break below its 50-midpoint for the first time in 2024. Interestingly, the Average Directional Movement Index (ADX) has not yet made up its mind, as it continues its downward move towards its 25-threshold.

Should the bulls remain confident, they could try to protect their gains and gradually lead the US 100 index above the January 24, 2024 high at 17,666. If successful, they could have the chance to test the February 12, 2024 high at 18,041 and then record a new all-time high, with the 18,500 level being their next likely target.

On the flip side, the bears are trying to retake the market reins. They could try to push the US 100 index below the October 26, 2023 trendline and then, provided that they overcome the January 6, 2023 trendline, the bears could stage a correction towards the busy 16,767-17,092 area. This is populated by the December 28, 2023 high, the November 22, 2021 high and the 50-day simple moving average (SMA), and it is expected to prove a strong support area.

To sum up, the US 100 cash index is in the red today as the bears are pinning their hopes on the momentum indicators signalling a much-delayed correction.


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