Was the few days of price action a bull trap? Only the future will tell.
But one sure thing, is that single days of price action are not enough to look at the global picture, a good reason to always take a step back and look at higher timeframes.
It is costly to be bearish on Equities which are growing stronger every month. However, with tariffs now in place and data deceleration, it is essential to approach Markets with more caution and treat risk-management measures with importance.
On Monday, we looked at Gold and Oil performance showing a different story than stocks – Commodities are good indicators of actual economic demand and it's good to look at their evolution.
Markets may also look at the Continuing claims being at their highest level since November 2021 – It will be essential to see how this story evolves.
Let's take a look at charts from the Dow Jones, S&P 500 and Nasdaq to see what technicals are showing
The Dow initially bounced higher from oversold NFP levels all the way back to the July range Pivot Zone (44,400 to 44,500).
These mid-range zones tend to be price magnets for retracements as lots of volumes get trades there.
The rebound stopped at the 38.2% Fib of the move down that started just a week ago, with daily highs at 44,519 (CFD, actual index 44,498).
The current 8H Candle is a strong bearish one, taking the index right around the middle of its longer run downwards channel – Buyers will want to step in around here to avoid Sellers to keep their strong hand.
Levels to keep in check:
Resistance Levels
- 44,100 (+/- 3 points) intraday resistance
- 44,400 to 44,500 Pivot turned Resistance
- All-time high resistance zone around 45,000
Support Levels
- Current Pivot 43,500 to 43,750
- NFP Lows Mini-Support (43,250
- 43,000 Main Support Zone
- 42,000 June post-war Support
The S&P got very close to the 6,400 handle with a 6,389 top at the Daily open but is currently down 70 points from there, and was relatively stronger than its Big brother the Dow as bulls took it to just above the 23.6% of the NFP down-move.
RSI Momentum is becoming bearish and sellers pushed the Index below its 8H MA 50.
The down session from two days ago stalled at the 6,300 landmark so it will be essential to watch what the index does when it gets there.
Any break below will look to test the NFP lows (6,216)
Key levels to place on your charts:
Resistance Levels
- 6,441 ATH on CFD (6,427 on SPX Index)
- Opening bell highs 6,404 (CFD, 6,389 on the actual index)
- FOMC Lows resistance Zone 6,350
Support Levels
- 6,300 Key Support – Current Pivot (+/- 15 points)
- NFP Lows and lower bound of May Channel – 6,220 to 6,240
- 6,152 January ATH level
The Nasdaq saw the biggest reversal, going from up 0.40% on the session to down 0.22% after rejecting the 23,500 zone.
The ongoing selling is currently stalling before the 23,215 50-period MA which will require a bullish impulse to avoid, once again, sellers keeping their current strong hand.
One major level to look to hold the higher timeframe uptrend is the lower bound of the May lows ascending channel.
RSI momentum seems to be turning lower but is still above the neutral line, a development to keep an eye on.
Levels to watch:
Resistance levels
- 23,732 Current All-time highs
- 23,500 psychological resistance zone
- Daily highs 23,578 (CFD, actual index 23,560)
Support levels
- Pivot Zone at 23,150
- Lower bound of ascending channel 22,915
- 22,700 Support
