The toppy price action following the post-FOMC rallies is finally taking its toll, hurting risk sentiment quite harshly.
Even without the context of a potential AI bubble, the real catalyst for the current drop appears to be a lack of confidence for the upcoming year.
The Nasdaq is leading all major US Indexes on the way down, dragging the S&P 500 and Dow Jones with it.
Between double tops, profit-taking after a fantastic year, and increasingly blurry fundamentals, the year-end outlook is dimming. The "Santa Rally" has yet to show up.
US Indexes Daily Chart Outlook – December 17, 2025 – Source: TradingView
The macro backdrop isn't helping: Fed Chair candidates are signaling bias rather than confidence, employment is showing cracks (though far from breaking), and inflation remains uncomfortably high.
The overarching theme is no longer investor confidence, but caution.
We will know more about the state of inflation tomorrow morning at 8:30 A.M. ET. I cannot emphasize enough how important this inflation report will be.
Overall, Equity valuations are extreme, and the Market seems overly optimistic but AI is a real revolution in terms of profit margin generation for big firms.
But some more technical factors, highlighted by a brilliant Bank of America Survey points out to Fund Managers not having much cash left in the bank.
So when investors are "tits up" long, it's difficult to see who will print new highs.
Cash Levels by Fund Managers – Bank of America Managers Survey from December 16.
Let's dive into our daily intra-session charts for the major US Indexes: Dow Jones, Nasdaq and S&P 500.
Tech Stocks and Producer Manufacturing are dragging Stocks lower
Current picture for the Stock Market (11:56 A.M. ET) – Source: TradingView – December 17, 2025
Dow Jones 4H Chart
Dow Jones (CFD) 4H Chart – December 17, 2025 – Source: TradingView
The Dow Jones is hurting less than its peers despite the correction.
Keep a very close eye on the Tuesday lows (47,943) and the overall 48,000 close for the rest of the year.
- Breaking below could trigger further downside
- Rebounding here points to the further respecting the Downwards channel from the correction
- Breaking back above 48,460 (November highs) would be necessary for Bulls to retake control of the action
Dow Jones technical levels of interest (unchanged from yesterday)
Resistance Levels
- All-time High resistance between 48,400 to 48,886
- 48,300 mini-resistance (channel top)
- November Highs 48,459 – top of retracement channel, acting as resistance
- 50,000 Psychological Level and Potential Fib Target (50,159)
Support Levels
- NFP Day lows 47,493
- Short-term support 47,800
- Key Support 47,000 (+/- 150) and MA 200
- August highs and November Lows 45,715
- 45,000 psychological level (next support and main for higher timeframe)
Nasdaq 4H Chart
Nasdaq (CFD) 4H Chart – December 17, 2025 – Source: TradingView
Tech stocks are hurting quite harshly, leading to the Nasdaq giving up its entire recovery from yesterday and reaching bi-weekly lows.
The 25,000 level which was acting as pivotal support is may now act as resistance as sentiment sours.
The daily candle is not looking good but there is some small dip-buying to keep track of.
Nasdaq technical levels of interest:
Resistance Levels
- Pivot 25,000 to 25,250
- 25,274 daily highs
- Resistance 25,500 +/- 75 pts
- intermediate resistance 25,700 to 25,850 (recent highs)
- All-time high resistance zone 26,100 to 26,300
- Current ATH 26,283 (CFD)
Support Levels
- Session lows 24,777
- 24,500 Channel lows and Main support
- October and November lows just below 24,000
- Early 2025 ATH at 22,000 to 22,229 Support
S&P 500 4H Chart
S&P 500 (CFD) 4H Chart – December 17, 2025 – Source: TradingView
The S&P officially broke its 6,800 to 6,900 consolidation which had been holding the Index for a while.
Some small buying is occurring at the support but from how things look, there will need to be quite a bullish candle to come back into the range for Bulls to take back control of the action.
It is now bearish on the short-term.
S&P 500 technical levels of interest:
Resistance Levels
- 6,800 Psychological Pivot (
- 6,930 (current All Time-Highs)
- Weekly highs 6,896
- Resistance 6,850 to 6,880 (testing)
- ATH Resistance 6,900 to 6,930
Support Levels
- Mini-Support 6,720 to 6,750 (current test)
- Session lows 6,750
- Support 6,720 to 6,750 and 8H MA 50
- 6,490 to 6,512 Previous ATH October lows (recent lows)
- 6,400 psychological support
Safe Trades!
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