US100 – Dark Cloud Cover Signals Possible Reversal Ahead

After the drop to 22,800, NAS100 recovered strongly and yesterday retested the recent ATH in the 23,800 zone.

However, by the close of the trading day, the index erased the entire intraday advance and closed in the red – leaving a Dark Cloud Cover candlestick formation on the daily chart.

As explained in my previous analysis, I believe the US indices are ready for a deeper correction after the incredible run-up since April.

Technical Outlook:
• The US100 is still holding above its recent ascending trend line.
• A confirmed break below this trend line could trigger an acceleration in selling pressure.
• The first downside target for bears is the recent low at 22,800.
• In the medium term, if a full reversal unfolds, I would not be surprised to see the index trading near 20,000 within the next 2–3 months.

The market has been on an extraordinary bullish streak, but this candle formation combined with extended price action could be the first sign that momentum is shifting.

Disclosure: I am part of TradeNation's Influencer program and receive a monthly fee for using their TradingView charts in my analyses and educational articles.