The US 100 index (Cash) has taken heavy fire over the past week, retreating very sharply after touching a record high of 13,904 in mid-February. The speed of the drop has accelerated in the last couple of sessions, but on the bright side, the price structure of higher highs and higher lows has not been violated, keeping the broader uptrend in play.
The short-term oscillators reflect the latest correction. The RSI has crossed below the neutral 50 barrier and looks to be headed for 30, while the MACD has fallen below its red trigger line and may turn negative soon.
If the bears stay in control and manage to pierce below 12,750, concerns around the health of the overall uptrend would intensify severely. If it is violated, the picture would turn more neutral, likely opening the way for more declines towards the 12,500 region. This is another crucial zone that acted as resistance back in August and then as support in January.
If buyers retake the wheel, their first target may be the crossroads of the 13,150 area and the 50-day simple moving average (SMA). If that territory is reclaimed, the spotlight would turn to the 20-day SMA currently at 13,495. This indicator was a support fortress in recent months, and it is currently in close proximity to the previous record high of 13,600. If the bulls power above this zone too, the focus would shift to the all-time high of 13,904.
Summarizing, as long as the index holds above 12,750, the longer-term uptrend remains intact.
