US stock indices test key support after higher CPI

Following the CPI data, US equities are declining. Although sellers are attempting to take control, crucial support levels have not been breached.

Among the major indices, the Nasdaq 100 is nearest to a key downside move, with buyers still protecting support.

The CPI reading, which came in above forecasts, has put US stocks under pressure:

• S&P 500: approximately 0.65% lower

• Nasdaq Composite: roughly 0.90% down

• Nasdaq 100: about 1.05% in the red

Last Tuesday, each of the three indices hit new all-time highs, but those breakouts did not hold. Buyers were given an opportunity to push further, but they could not capitalize.

Sellers are now stepping in. Still, the drops have not yet created a clear bearish trend across the board. Important moving average support levels are still active, providing benchmarks for traders to assess if sellers can strengthen their position.

Nasdaq 100 stands out as the most exposed.

The Nasdaq 100 is nearing its ascending 200-hour moving average, currently at 30,128.67. The index touched a low of 30,239.63 today, leaving it roughly 111 points away from that support.

The price is close, but a break below that level is still required for sellers to gain ground.

If the index falls below the 200-hour moving average and holds there, the bearish sentiment would intensify, paving the way for additional declines. The next significant downside target would be the rising 100-day moving average, approximately at 29,627.

As long as that level holds, buyers have a reference point to defend and set their risk parameters.

Nasdaq Composite: straddling the hourly moving averages

The Nasdaq Composite has dropped below its 100-hour moving average (27,168.43), handing sellers short-term victory. However, the price still holds above the rising 200-hour moving average (26,820.47).

Given the price sits between these two averages, the short-term technical stance is more balanced.

If the index rises back above the 100-hour moving average, that would relieve pressure and help buyers regain a foothold. On the other hand, slipping under the 200-hour moving average would grant sellers further influence, aiming for the swing level and rising trendline around 26,676.

Below that, the 100-day moving average close to 26,290 is the following downside objective.

S&P 500: buyers defending the 100-hour moving average

The S&P 500 touched a low of 7,751.93 today, staying just above its ascending 100-hour moving average (7,745.70).

Last Thursday's decline also challenged the 100-hour moving average and found buyers. This level serves as a key indicator once again.

If it remains above, buyers maintain a foothold. If it falls below and stays under, sellers gain control, with the 200-hour moving average (7,706.45) the next downside objective.

Market insight: a decline needs confirmation.

A breakout that fails to achieve a new high is a signal. A breach of key support gives the next evidence.

The CPI data has provided sellers with a push, but the technical indicators will decide if that push develops into something more. Observe how the price behaves at support and if any break is sustained.

Sellers are making a move, but they have more to accomplish.