The US 100 cash index is currently in the red, trading slightly below the 100-day simple moving average (SMA) and showing a decline from its recent all-time high. Despite some positive earnings reports, market sentiment remains bearish as investors await key US data releases that could significantly impact the upcoming Federal Reserve meeting scheduled for May 1st.
Analysis of Momentum Indicators
Momentum indicators are reflecting the negative sentiment in the market. The Average Directional Movement Index (ADX) indicates a bearish trend is in place, while the Relative Strength Index (RSI) remains below its midpoint. Notably, the stochastic oscillator is attempting to break above both its moving average and oversold territory. If this bearish signal gains momentum, it could result in a further decline in the US 100 index.
Potential Scenarios for the US 100 Index
If bearish sentiment persists, there is a possibility that the US 100 index could drop below the 16,767-17,007 range, which includes highs from December 28, 2023, and November 22, 2021. Additionally, the index might test the 15,708-16,050 area if the bears successfully breach the key 200-day SMA at 16,333.
On the other hand, bullish investors are attempting to regain control of the market by pushing the US 100 index above the crucial 17,443-17,797 range, defined by the January 24, 2024 high and the 100-day SMA. If successful, they may target the resistance levels at 17,937-18,041 and potentially reach a new all-time high.
The US 100 index is currently facing the possibility of a new downleg, especially if upcoming US data releases continue to be strong. Bears are aiming for a lower low and laying the groundwork for a more prolonged correction in the market. Both bullish and bearish scenarios are on the table, and investors will closely monitor key indicators and data points to anticipate the future direction of the US 100 cash index.