Traders are Moving Past Powell's Investigation - US Stock Index Outlook & Pre-CPI Trading Levels

Ben Graham · 3 horas atrás

The morning session was nothing short of volatile.

Overnight futures took a hit following news of the DOJ's investigation into Jerome Powell, once again casting a shadow over the Federal Reserve's independence. Yet, this market—and its traders—should never be underestimated.

Stocks caught a bid immediately after the open as participants shrugged off the headlines, using the early drop as yet another buying opportunity.

Despite modest percentage gains on the day, the technical achievements are significant: the Dow is pacing for another record close, the Nasdaq is breaching monthly highs, and the S&P 500 is trading at fresh All-Time Highs.

Individual names are also making history, with Google (Alphabet) recently breaking the $4T market cap milestone as Apple officially announced that they would require Google services for Apple Intelligence.

Goggol 120126 — Google Daily Chart – Source: TradingView

It seems "bad news is good news" in this environment.

As long as the investigation remains a headline rather than an official indictment, investors remain resolutely bullish. Supplemented by heightened geopolitical pressures boosting defense and industrial sectors and driving metals to new highs, the trend remains intact.

However, expect momentum to potentially taper off as the day progresses; traders will likely begin squaring positions ahead of tomorrow's massive Inflation (CPI) release at 8:30 A.M (expected at +0.3% to 2.7% Y/Y)

Let's dive into our daily intra-session charts and NFP trading levels for the major US Indexes: Dow Jones, Nasdaq, and S&P 500.

Heatmap 120126 — Current picture for the Stock Market (14:42 P.M. ET) – Source: TradingView – January 12, 2026

Healthcare is hurting once again, seeing quite some outflows in the beginning of this after a huge 2025 trading.

Financials are also struggling in the session as traders await key earnings for JP Morgan and Bank of New York Mellon tomorrow, while Energy drags from Exxon's CEO comments on "uninvestable" Venezuela projects.

The rest of the Market shows green.

Dow Jones 2H Chart

DJIA 120126 — Dow Jones (CFD) 2H Chart – January 12, 2026 – Source: TradingView

Up a strong 1.16% since its open, the Dow is on pace to break new records again, now evolving within a strong intraday upward channel.

A huge bull candle with no wicks is showing bull domination ahead of CPI, powered by its Consumer Defensive and Machinery Sectors – Walmart is dominating the charts up 3.70%.

A soft report tomorrow could easily send the Dow to 50,000.
A strong report however would hurt rate cut prospects and could lead to a retest of Major support (Top candidate being 48,600 and 2H 200-MA).

Dow Jones technical levels for trading:

Resistance Levels

49,650 to 49,670 Current ATH Resistance
46,670 All-Time Highs
50,000 Potential Psychological Resistance

Support Levels

49,324 2H 50-Period MA
49,000 Psychological Pivot
48,400 to 48,800 Major Support (2H MA 200 at 48,670)
Psychological Support at 48,000
45,000 psychological level (Main Support on higher timeframe)

Nasdaq 2H Chart

Nasdaq 120126 — Nasdaq (CFD) 2H Chart – January 12, 2026 – Source: TradingView

After double top threats and a sluggish price action throughout the past months, the Nasdaq is taking the lead again, brought up by the strong AI stock performance today:

AVGO, Oracle, Google, a rebounding Nvidia and many others are pushing the Tech-Heavy index to new highs, also breaking the double-top formed in the past week.

Still, traders will need to be cautious regarding short-timeframe bearish divergences.

Tomorrow's NFP will be key to monitor whether today's move fakes out or materializes into a real break.

Clearing the CPI, staying above 26,860 would point to a test of the October All-Time Highs.
Failing to stay above current resistance could lead to a test of the 25,000 Level (25,100 is a key level to watch in this event, things would look bearish below).

Nasdaq technical levels of interest:

Resistance Levels

intermediate resistance 25,700 to 25,850 (breaking?)
Session highs 25,877
All-time high resistance zone 26,100 to 26,300
Current ATH 26,283 (CFD)

Support Levels

25,646 2H MA 50
Pivot 25,500 +/- 75 pts
Main Support 25,000 to 25,250
24,500 Main support
Early 2025 ATH at 22,000 to 22,229 Support

S&P 500 2H Chart

sp500 120126 — S&P 500 (CFD) 2H Chart – January 12, 2026 – Source: TradingView

The S&P 500 went to break its past day record highs yet again, with the new highs set at 6,986.

Similarly to the Nasdaq, traders will need to be cautious regarding a so so optimistic divergence forming as momentum slows during the ascent.

To mitigate the slow rise however, a consistent uptrend sustains overall resilience in the Market – The S&P could hold well a disappointing CPI tomorrow.

Of course, it will depend on how bad it is (if it is).

A bullish CPI could well launch the Spoose beyond 7,000: 7,040 and 7,080 are potential profit-taking levels for the Index.

S&P 500 technical levels of interest:

Resistance Levels

ATH Resistance 6,945 to 6,975
Current All-Time High 6,973
1.382% Fib-Extension potential resistance at 7,001

Support Levels

6,913 4H 50-MA Support
6,800 Psychological Pivot and Range lows
Support 6,720 to 6,750 and 8H MA 50
6,400 Major psychological support

Safe Trades and Good Luck for tomorrow's NFP!

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