|
Shaky Support Holds for 2nd-Straight Week
The stock market got some good economic news on Friday and throughout the week but resistance held strong thru Wednesday. Thursday’s action was bearish and pushed the prior week’s shaky support levels back in play while Friday’s slightly bullish action once again avoided a major market meltdown.
The Nasdaq finished at 22,546 (-0.2%) after testing a low of 22,402. Key support at 22,500 was breached but held. Resistance is at 23,250.
The S&P 500 tagged a low of 6,794 while settling slightly higher at 6,836 (0.05%). Support at 6,800 held. Lowered resistance is at 6,900.
The Dow closed at 49,500 (0.1%) with the high at 49,743. Prior and key resistance at 49,600 was cleared but held. Support is at 49,000.
Earnings and Economic News for Tuesday
Before the open: Medtronic (MDT)
After the close: Palo Alto Networks (PANW), Cadence Design Systems (CDNS), Devon Energy (DV)
Economic News
Empire State – 8:30am
Home Builder Confidence – 10am
Technical Outlook and Market Thoughts
For the week, the Nasdaq and the Russell dropped 2.1%. The S&P 500 declined 1.4% and Dow was down 1.2%. Year-to-date, the Nasdaq is now down 3% and the S&P is off by 0.1%. The Dow is up 3% and the Russell has gained 6% for 2026.
The S&P 500 joined the Nasdaq last week by giving up it 2026 gains and turning red for the year. Granted, the index is only down 9 points, but it shows the bears are trying to mount some momentum. The other slightly bearish development from last week is the fact volatility closed above 20 for the second-straight session.
As far as the S&P 500, the index remains in a 200-point and 38-session range between 6,800-7,000 following the close just above support the former. Multiple closes below 6,800 and the bottom of the range would be a bearish signal with further risk to 6,600-6,500 and the 200-day moving average.
Lowered resistance is at 6,900-6,950 and the 50-day moving average.
The Nasdaq held crucial support at 22,500 on Friday’s intraday test to 22,402 but a fresh low for 2026. Closes below 22,500 keeps 22,000-21,500 in focus and levels that would represent 8% and 10% pullbacks off the all-time high from October 29th at 24,019.
New resistance is at 22,750-23,000. Closes above 23,250 and the 50-day moving average would be a slightly renewed bullish signal.
The Dow fell back below 49,600 on Thursday after holding this level the previous four sessions. Friday’s peak reached 49,743 with new resistance at 49,750-50,000 holding. Last Tuesday’s record high hit 50,512.
The closes below new support at 49,600 keeps risk down to 49,000-48,500 and the 50-day moving average in focus.
The Russell 2000 held key support at 2,600 in back-to-back sessions with Thursday’s bottom at 2,604. Closes below this level and the 50-day moving average would imply further weakness down to 2,575-2,525.
Resistance is at 2,675-2,725 with the January 22nd record peak at 2,735.
The S&P 500 Volatility Index (VIX) closed above 20 for the second-straight session with Friday’s peak at 22.40. Lower resistance at 22.50-24 held. There is upside risk to 27.50-30 if the latter clears.
New support is at 20-19.50. Closes below 19 would be a slight relief for the bulls. However, the 17.50 level needs to be recovered to ease some of the volatility concerns.
|
