- US 30 cash index edges higher, a tad above the May 25 low
- The short-term bearish trend remains dominant
- Momentum indicators don’t point to a reversal yet
The US 30 cash index is trying to record the second consecutive green candle since it managed to bounce off the 50% Fibonacci retracement of the January 5, 2022 – October 3, 2022 downtrend. The bulls are desperately trying to set up their defense following the aggressive sell-off since the July 27 high, but the bearish series of lower lows and lower highs remains intact.
The momentum indicators appear to support the bears’ intention. The RSI is hovering at its lowest level since the September 2022 bearish move. Similarly, the Average Directional Movement Index (ADX) is still edging higher and signaling the presence of a strong bearish trend. Additionally, the stochastic oscillator continues to trade at the lower end of its oversold territory. While it can stay there for a while, a possible move higher, above both its moving average and oversold region, could be seen as a strong bullish signal.
Should the bears remain confident, they could try to break the busy 32,767-33,028 area that is populated by the June 21, 2021 low and the 50% Fibonacci retracement. If successful, they could set their eyes on the February 24, 2022 low at 32,229, and then potentially plot a course towards the important 31,426-31,780 region.
On the flip side, the bulls are keenly determined to keep the US 30 index above the 32,767-33,028 area. They could then have a go at overcoming the 33,518-33,834 range, set by the 200-day simple moving average (SMA), the October 1, 2021 low and the 61.8% Fibonacci retracement. Even higher, the next resistance area could come at the 34,280-34,302 region.
To sum up, the US 30 cash index bears remain in control of the market and are probably taking a breather after a strong sell-off. The bulls are hoping for a sizeable upleg but lack the support of the momentum indicators.
