The US 100 cash index recorded a new all-time high of 10,727.95 earlier today, continuing the steep increase from the 14-month trough of 6,635. The golden cross within the 50- and the 200-day simple moving averages (SMAs) remains intact and the RSI indicator is heading higher marginally above the 70 level. However, the stochastic oscillator is looking overbought and is flattening, suggesting a downside correction in the short-term.
A significant rally above the all-time high could see the index to run towards the 161.8% Fibonacci extension level of the downward wave from 9,758 to 6,635 at 11,657.69 but first it needs to beat the 11,000 psychological number.
Alternatively, a downside move could find immediate support at the 10,305 inside swing high before meeting the 20-day SMA at 10,155. Beneath this line, the 23.6% Fibonacci retracement level of the up leg from 6,635 to 10,727 at 9,758, which overlaps with the 50-day SMA could be a crucial barrier ahead of the 9,383 support.
Summarizing, the index is strongly bullish and only a decisive drop underneath the 61.8% Fibonacci of 8,201 may switch this outlook to neutral. Â
