It’s been a wild 2-week period for technology stocks in the US 100 index, which has taken prices on a 13% ride from 29178 (July 21st high) down to 27050 (July 29th low) and back up to 28500 again (Current levels 0700 BST). The down move was led by growing concerns regarding the size of AI capital expenditure being made by Magnificent Seven companies and a bout of panic selling in previously high-flying chipmaker stocks, while prices were given a major boost off the lows late last week on the back of impressive Microsoft and Amazon earnings which helped to throw everything into reverse, and potentially leave sentiment toward the US 100 on a knife edge to start August.

Looking forward in the short term, the focus for traders could be in several key areas. Events in the Middle East may continue to impact sentiment after President Trump announced on Sunday that he had postponed the latest round of planned attacks to restart talks with Iran possibly as early as later today (Bloomberg). Earnings from Palantir Technologies tonight (after close) and then Advanced Micro Devices (AMD) tomorrow (after close), could also be key volatility drivers.

Then there are the latest updates on the health of the US labour market to consider, with the JOLTs Job Openings survey on Tuesday (1500 BST), ADP Private Sector Payrolls on Wednesday (1315 BST) and the all-important Non-farm Payrolls report on Friday (1330 BST) which could generate some important index moving headlines. Traders are sensitive to the real possibility of an interest rate hike from the Federal Reserve at their next meeting in September, and while policymakers could be swayed to postpone hikes if the jobs market is weakening and unemployment rate rising, a resilient series of readings could help solidify their decision to hike. Either way, US 100 volatility could remain elevated across the next 5 trading days.

Technical Update: Limited Bounce or Positive Sentiment Shift?

Since printing the June 22nd recovery high at 30680, the US 100 index has experienced a negative phase of sentiment, which registered a 12% decline into last week’s low at 27050. A move that may have been accelerated by the closing break below a potential support area at 28206/28209 which marked the June 9th and July 17th lows.

As a counter move to this weakness, last Thursday and Friday did see a strong recovery reemerge and traders may now be wondering where the next directional risks lay, especially as the recovery move still remains below what might be anticipated as a resistance focus between 28749/28767 (see chart above), an area equal to the 61.8% Fibonacci retracement of the July 10th to July 29th decline and the declining Bollinger mid-average.

Does this mean risks are developing for a more prolonged phase of price strength or is the latest recovery a limited move before fresh weakness is seen again to extend what could be described as a downtrend pattern?
Being aware of the potential key support and resistance levels may help to answer this question.

Potential Resistance Levels:

Following Thursday and Friday’s recovery the 28749/28767 zone may appear to be the first key resistance focus this week. How 28749/28767 is defended on a closing basis could determine whether further price strength emerges to challenge higher resistance levels.


Closing breaks above 28749/28767 could see risks shift toward further price strength to test the next resistance at 29178, which is the July 21st session high, and if this is also breached, on toward 29850, the July 10th upside extreme.

Potential Support Levels:

While the 28749/28767 resistance area remains intact on a closing basis it is possible that there could be further attempts to resume price declines, which could keep the pattern of lower price highs and lower price lows in place. If this is the case, focus could shift to 27812, a level equal to half of last week’s rally, as the first key support focus.


While not a guarantee of continued price declines, closing breaks below 27812 could lead to further downside momentum. Such moves, if seen, might open scope toward 27050, which is the July 29th session low, and then the deeper 50% retracement at 26753.



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