The major U.S. stock indices are trading lower on the day, but all have recovered from their post-CPI lows after the inflation report came in largely as expected and, importantly, not worse than anticipated.
- Dow Jones Industrial Average: -378 points (-0.74%)
- S&P 500: -26 points (-0.35%)
- NASDAQ Composite: -114 points (-0.45%)
The NASDAQ briefly attempted to turn positive following the CPI release but has since rotated back to the downside. From a technical perspective, the index pushed above a key swing area resistance target at 25,701.90 (see renumbered circles on the chart above), reaching a session high of 25,726.00 before running into sellers and retreating.
For buyers to regain control, the index needs to move back above that swing area and hold the break. A sustained move higher would shift attention toward the 200-hour moving average at 26,155.81, which represents the next significant upside target.
On the downside, failure to reclaim and hold above the swing area keeps sellers in the game. In that scenario, traders will look toward yesterday’s low near the 25,000 level as the next support target. A break below that level would increase downside momentum and expose the 38.2% retracement of the rally from the March 30 low, which comes in at 24,707.22.
For the S&P 500, the index remains below its 200-hour moving average at 7,424.08, keeping the broader technical bias tilted to the downside. Today’s rally attempt stalled at 7,396.56, remaining short of that key resistance level.
On the downside, traders will be focused on the support zone between 7,321 and 7,341. A break below that area would strengthen the bearish case and shift attention toward yesterday’s low near 7,233. If sellers can push below that level, the next downside target comes in at the 38.2% retracement of the rally from the March low, which is located at 7,123.08.
As long as the index remains below the 200-hour moving average, sellers maintain a technical edge. Buyers need a move above that level to regain control and increase bullish momentum.
