Stocks pump but doubts remain – Dow Jones and US Stock Index Outlook

• Stock Indexes rebound swiftly as Trump spoke in Davos but mid-session brings profit-taking
• Entire Market is propped up by better sentiment as speech tone eases
• Exploring Technical Levels for the Dow Jones, Nasdaq and S&P 500

Buyers are rising again this morning following a difficult start to the week.

Sentiment had been negative since the weekend following comments from the Trump Administration regarding the acquisition of Greenland.

The demands is blunt , and the primary concern is that this extends aggressive policy toward historic allies, going beyond conflicts with nations like Venezuela or Iran.

Anxiety peaked yesterday after the EU suspended the July US-EU Trade Agreement, but today's bullish price action suggests the market is already moving forward.

President Trump's generally not-so-aggressive tone at Davos helped sentiment, as he avoided escalating tensions further – He said that he won't use force.

However, doubts persist, as EU leaders likely require a retraction of the Greenland rhetoric before tensions truly ease.

Commodities are seeing a significant rebound today. WTI Oil rose to $60, and Natural Gas extended its squeeze with another 20% daily gain. In the metals complex, Gold and Platinum rose 3% to fresh highs, while Silver found resistance near $93.

Except for European benchmarks, Stock Markets are shining green around the globe as TACO hopes make their return, with all US Indexes up around 1% or more today and the Nikkei catching up from its recent fall.

The economic calendar remains light for the rest of the session – Notable releases include a high Canadian PPI report, reflecting supply chain rerouting from tariffs, and a sharp decline in US Pending Home Sales, which fell 9.3% against expectations of a 0.4% rise.

Tomorrow brings crucial PCE and GDP data, the final inputs before next week's FOMC meeting.

The picture is looking very green throughout except for MSFT not following its Magnificent 7 peers and Consumer Defensives struggling.

US Stocks could be posing a session top as profit-taking flows form – Dive into our daily session charts and trading levels for the major US Indexes: Dow Jones, Nasdaq, and S&P 500 – Watch for potential bull traps!

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The DJIA really rallied back fast, breaking out of its past day corrective sequence and retesting the 49,000 Momentum Pivot Area.

Momentum has showed some doubtful signs overall – The spiky action from today's rebound shows a general slowdown in volumes as uncertainty still reigns this Market.

The 2H RSI is back to bullish territory but the reactions to a neutral area retest will have to be monitored as the buying action stalls at the 200-MA (48,978).

• Looking at where we are, remaining above the session support at 48,700 adds further chances of a real rebound.
• Closing below 48,600 would hint at a bull-trap until the uncertainty clears.

Dow Jones technical levels for trading:

Resistance Levels

• Christmas ATH High Timeframe Momentum Pivot – 49,000 (2H MA 200 48,970)
• Session Highs 49,067
• Short Timeframe Resistance 49,200 to 49,300
• 49,650 to 49,670 Current ATH Resistance
• All-time Highs 49,710
• 50,000 Potential Psychological Resistance

Support Levels

• Intraday support 48,600 to 48,700
• November ATH 48,300 to 48,500 Support
• Session lows 48,339
• Psychological Support at 48,000
• 45,000 psychological level (Main Support on higher timeframe)

Nasdaq is still not cleared out of its descending sequence.

The ongoing correction is actually retracing a big part of this morning's rally. Failing to repass above its 25,000 Pivotal support zone, the mid-term outlook remains bearish for the tech-heavy index.

Still, as long as the overall action holds above the 24,500 Range lows (Key Support), the longer-term outlook remains positive.

Nasdaq technical levels of interest:

Resistance Levels

• Momentum Pivot 25,200 to 25,500 +/- 75 pts
• 2H MA 50 and Session highs 25,330
• Intermediate Resistance 25,700 to 25,850
• All-time high resistance zone 26,100 to 26,300
• Current ATH 26,182

Support Levels

• Minor Support 25,000 to 25,250
• session lows 24,913
• 24,500 Main support
• Early 2025 ATH at 22,000 to 22,229 Support

A key test is appearing for the S&P 500 as it tests the lows of its Key session Support area (6,830 to 6,850) – Rebounding here relaunches better prospects.

However if things remain like this, sellers could take the lead.

Any session close below 6,830 would confirm further downside for the S&P as it forms yet another downward sequence, combined with a bearish 50-200 Moving Average cross in intraday timeframes.

S&P 500 technical levels of interest:

Resistance Levels

• Pivot Zone 6,880 to 6,900
• 4H 200-period MA at 6,887
• Previous ATH Resistance 6,945 to 6,975
• Current ATH Resistance at 7,000

Support Levels

• Mini-Support 6,830 to 6,850 (testing)
• 6,800 Psychological Support
• 6,789 session lows
• Support 6,720 to 6,750 (Mid-December lows at 6,729)
• 6,400 Major psychological support

Safe Trades!

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