- US 30 index in the green again, after Tuesday’s decent correction
- It remains a tad below its all-time high but bulls might start to worry
- Momentum indicators mixed; all eyes on the stochastic oscillator
The US 30 cash index is in the green again today, reacting to Tuesday’s sizeable red candle that slightly unnerved the bulls. The index remains a tad below its February 13, 2024 high at 38,929 but it is evident that the market is questioning its direction following an almost straight-line rally. The US 30 index is currently 19% higher than the October 27, 2023 trough.
In the meantime, certain momentum indicators could be on the verge of sending bearish signals. More specifically, the Average Directional Movement Index (ADX) is edging lower with the DI+ subcomponent remaining stuck below the 25-midpoint. Similarly, the stochastic oscillator has broken below its overbought (OB) area, and it is trying to widen the gap from its moving average. Should this move pick up speed, it could be seen as a strong bearish signal. On the other hand, the RSI has completed three months above its 50-midpoint and is thus revealing the ongoing bullish pressure.
Should the bulls ignore the mixed signals, they could try to regain market control and lead the US 30 index towards the February 12, 2024 high at 38,929. If they manage to overcome this area, they could then stage a much stronger rally with the 40,000 level possibly being the next key target.
On the flip side, the bears are trying to recapture the market reins and gradually push the US 30 index towards the 37,693-37,813 range, which is populated by the January 2, 2024 high and the 50-day simple moving average (SMA). The bears could then aim for the next support area at 36,951 provided they manage to overcome the long-term October 13, 2022 upward sloping trendline.
To sum up, the US 30 cash index bulls are still enjoying their hard-earned gains but Tuesday’s strong red candle and some early bearish signs from the momentum indicators could gradually turn the table in favour of the bears.
