US 100 – What Next For Tech Stocks After The Capitulation?As an uneasy calm settles across the financial markets after yesterday’s 3.2% fall in the US 100, which brings the total slump from the all time highs of 22226 seen on February 18th to 12.5%, this can often be an ideal time to reassess the key chart levels and technical trends for the index going into the NY open later today, but more importantly so you are prepared to react to the outcome of the next potential volatility event on the horizon, which may well be tomorrow’s US CPI release at 1230 GMT.
With traders and investors dumping US assets across the board in the last week as fears grow about the negative impact of President Trump’s tariffs and spending cuts on the US economy, positioning, in the short term at least, may be cleaner than it has been for a while going into this data release. Meaning there could be some potential to see an outsized reaction to a lower-than-expected inflation reading, or, if the number is higher than expected a continuance of the recent sell off in the US 100 to even lower levels.
So, with that in mind, let’s reassess the technical outlook.
Technical Trends: US 100
Since the all-time high of 22226 for the US 100 Index was seen on February 18th, there has been an inability to sustain further upward momentum, and a clear rejection of the advance has emerged. This has resulted in what some might describe as a bearish capitulation, as an acceleration lower has materialised over the last few trading sessions.
So, where does this leave US equities and particularly the US 100 index, ahead of what is set to be another potential volatility storm in the sessions ahead?
Technical Setup:
The almost uninterrupted phase of price weakness since the mid-February all-time highs has been a move that has seen some important support levels breached. This includes the 20477 correction low posted on January 13th and also the 19904 low, which was the November 4th downside extreme. (see chart above).
However, interestingly, initial declines this morning (Tuesday 11th March) have tested what might prove to be an important support at 19142. This level is equal to the 61.8% Fibonacci retracement of the August 5th 2024 to February 18th 2025 strength, so, traders may well be focusing on this price level as being a potential pivotal area for any move that comes next.
Potential Upside Focus If the Support Holds
While the 61.8% Fibonacci retracement isn’t a guaranteed support, it has held current declines, so far at least, and at present prices are attempting to recover.
With this in mind, it is important to be prepared and have an idea of some potential resistance levels to focus on. Areas that if broken in a move higher, may lead to the possibility of a more sustained period of price strength.
The first resistance to monitor could possibly be 19623, which is equal to half this week’s current range. Breaks above this level might open the potential for moves back to what could be a stronger resistance level for traders at 20306, which is the 38.2% retracement of February/March declines.
Potential Downside Focus If the Support Is Broken
Just because the 19142 retracement support has held so far this morning, doesn’t mean it will continue to do so. It can be wise to be aware of the next support levels on the downside if fresh selling pressure materialises and a break below 19142 develops.
Closing breaks below 19142 may suggest the current weakness can extend, with the focus then switching to potential support at 18297, which is the September 6th session low. If this were to give way on a closing basis, then the August 5th downside extreme at 17235, may come into play.
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