With Nvidia’s earnings due this Wednesday after the market close, traders trimmed some of their exposure in the US 100 and the US 500 stock indices despite optimism for strong earnings, whilst the US 30 index ticked by 0.2% to unlock a new record high of 41,423 on the back of increases in stocks such as 3M Co, Disney, American Express, and Caterpillar.

Tuesday’s session started with mild losses, but the 20-period simple moving average (SMA) provided a strong helping hand near 41,090. The US CB consumer confidence index added some impetus to the price after rising surprisingly to 103.3 from a revised 101.9 in July - the highest since February - displaying improving sentiment over current and future business conditions but it also reflected some remaining concerns about the labor market.

Nevertheless, downside risks have not evaporated yet as the doji candlestick at the top of the uptrend is still questioning the case of a bullish trend continuation towards 41,950-42,000. Yet, as long as the 41,080 floor holds, the focus will remain on the upside. Specifically, the 41,290 region must give way for the bulls to stage a meaningful rally.

In the opposite case, if the index slips below 41,000, the 50-period SMA could come to the rescue at 40,800 ahead of the 100-period SMA at 40,496.