Why this Weekly Close Matters as Fear takes over US Stocks

US Equities have endured another rough week, defying the logic of strong earnings reports from heavyweights like Walmart and Nvidia, both of which provided optimistic forward communications.

The market is currently wrestling with a toxic mix of headwinds hurting sentiment:

Growing fears that AI investment has peaked coinciding with signs that the labor market may also be topping out.

Furthermore, tariffs—now in place for almost six months—are visibly biting the American consumer, fueling concerns that interest rates could be held higher for longer as the Fed battles the inflationary prospects of trade barriers.

However, a lifeline appeared in the form of NY Fed President John Williams, who brought back hopes for the December meeting.

His comments single-handedly resurrected the probability of a cut, swinging market pricing from a bleak 20% chance yesterday morning back up to above 70%.

This massive repricing only magnifies how quintessential incoming data will be as the Fed’s double mandate slowly shifts its focus back towards inflation.

After a 2% drop throughout all major US Indices yesterday, some small dip-buying is occurring, but it remains inconsequential due to the prevailing high fear levels.

As time develops, some selling flows are picking up, making the whole picture even more blurry.

The weekly close will be critical for next week's action: we are trading right around the October lows.

Any breach lower could drag further selling and confirm a breakdown, while a rebound from here points more to rangebound action as more data unfolds.

You can see how tricky Markets are. Nvidia is actually down for the second consecutive session after posting record earnings!

Let's dive right into the intraday outlook for all three US Major indices: Dow Jones, Nasdaq, and S&P 500.

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The Dow Jones oscillates around the 46,000, slightly more resilient than its tech-heavier peers.

The better prospects from the Walmart Earnings has helped to maintain some life in the DJIA which represents US Manufacturing and defensive sectors with more emphasis.

It's resisting better to the selling flows but would also need better sentiment to get back on track: Its 8H RSI is struggling to bounce higher.

Still, the price action stands at a key psychological level.

• Closing above the 46,000 level should bring some dip-buying into next week.
• However, below this, further correction should be expected.

Dow Jones technical levels of interest:

Resistance Levels

• Current All-time high 48,459
• Resistance zone 47,500 - 47,650
• Pivot now resistance 47,000 to 47,200
• 46,400 to 46,400 Momentum Pivot and 4H 50-period MA (46,375)
• Psychological resistance at 48,000

Support Levels

• 46,000 +/- 300pts Immediate Support
• August highs and Yesterday's Lows 45,715
• 45,000 psychological level (next support and main for higher timeframe)
• 44,400 to 44,500

The Nasdaq is struggling the most out of all US Indexes, also trying to hang onto the 24,000 level.

There is an ongoing battle between sellers and buyers at the lows, therefore keep an eye on the Weekly lows (23,841): Breaching this could add further pressure to the Index.

If things stay around here however, a short-timeframe double-bottom could help bulls towards a rebound – Watch if the session closes above or below 24,000!

Nasdaq technical levels of interest:

Resistance Levels

• Mini-resistance at 25,500 Gap
• intermediate resistance 25,700 to 25,850
• All-time high resistance zone 26,100 to 26,300
• Current Pivot 25,000 to 25,250 (Breaking)
• Channel highs 25,300 to 25,350

Support Levels

• October low support just around 24,000 (Testing)
• Weekly lows 23,841
• August NFP highs at 23,700 (next support)
• Early 2025 ATH at 22,000 to 22,229 Support

The S&P 500 has broken below 6,600, a Major psychological support.

Similarly as its peers however, it is holding its October ATH Support levels.

• Bouncing here will be key for buyers in an attempt to regain the 6,600 level.
• Breaching the 6,512 lows would on the other hand be an acceleration sign for Sellers.

S&P 500 technical levels of interest:

Resistance Levels

• 6,930 (current All Time-Highs)
• 6,694 session highs
• 6,680 to 6,700 support now Pivot (session highs)
• 6,800 Psychological resistance
• Resistance 6,720 to 6,750 (testing immediate)

Support Levels

• 6,490 to 6,512 Previous ATH October lows Immediate Support
• 6,400 Key Support
• 6,210 to 6,235 Support (August NFP Lows)
• January 2025 Record 6,152

Safe Trades!

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