Stocks rebound, is it TACO Tuesday? – Dow Jones and US Stock Index Outlook

Ben Graham · 1 hora atrás

Stock Indexes reject their recent highs as Trade uncertainty returns
Still, dip-buyers are showing resilience, taking Stock Indexes back higher after a rough post-MLK Day Session open.
Exploring Technical Levels for the Dow Jones, Nasdaq and S&P 500

Wise traders usually refrain from trying to make sense of Market movement – And rightfully so.

After two consecutive rejection days for US Indexes (and their Futures as Stock Markets were closed yesterday), dip-buyers are coming right back to the Market.

Opening 2% below their Friday close on average, Stock Indexes were struggling to find any optimism in the headlines before US Treasury Secretary Scott Bessent saved the day.

His latest comments eased the pessimistic sentiment, saying that he is "urging everyone here to [...] take a deep breath, and let things play out", and not to retaliate against the US.

A Passive-aggressive tone from the Treasury secretary, but traders seem to be leaning more to the passive side. Participants seem to take this comment as a guide for yet another TACO (Trump Always Chickens Out) in his schemes.

My own thesis is that it could be a gigantic farce to distract the world from Iran, but it's just a theory.

In case you missed it, Bessent also pinpointed next week as the day the world will learn the President's choice for the next Fed Chair. This will be a key event for upcoming sessions as traders prepare for Earnings Season.

In any case, US Stock Futures were down ~1.50% at one point in the morning session and are now coming right back to unchanged – A significant shift in sentiment.

US spot Indexes are still down around 1%, catching up with yesterday's red day in futures trading.

heatmap 2001 — Current picture for the Stock Market (11:26 A.M. ET) – Source: TradingView – January 20, 2026

Intel is one of the only green Stock in today's session – The large Government stake in the company allows it to rebound well. However, looking at the rest of the Market, the picture is bleak.

Mag 7s are struggling quite harshly, but things could get better as we near their earnings season – It will of course depend on whether they can beat their high expectations.

forbes Earnings — Expected Earnings for Mag 7 Stocks – Source: Forbes, Bloomberg

Netflix is reporting today after the close, Intel reports on Thursday and for the majority of other Mega Caps, participants will have to await for next Wednesday.

We will explore as we dive into our daily session charts and trading levels for the major US Indexes: Dow Jones, Nasdaq, and S&P 500.

Dow Jones 4H Chart

dow jones 200126 — Dow Jones (CFD) 4H Chart – January 20, 2026 – Source: TradingView

The 4H 200-period Moving Average is coming at clutch time to save the day, particularly as Scott Bessent timed his comments well, leading to a 0.80% bounce.

Still, bulls will have to push today's session close above the Key Momentum Pivot at 48,870 to push Sentiment higher and confirm the TACO (headlines would tend to follow the rebound).
Failing to break above the Pivot Zone points to further downside, where the 48,000 Major Support level could be attained swiftly.
- Below this, the Dow enters bearish territory.

Except for Thursday's PCE data and GDP data, there won't be much other than a de-escalation between the EU and US to pump Markets.

Dow Jones technical levels for trading:

Resistance Levels

Christmas ATH High Timeframe Momentum Pivot as Resistance – 481870
Session Highs 48,941
49,650 to 49,670 Current ATH Resistance
All-time Highs 49,710
50,000 Potential Psychological Resistance

Support Levels

Session lows and 4H 200-MA 48,530
November ATH 48,300 to 48,500 Support
Psychological Support at 48,000
45,000 psychological level (Main Support on higher timeframe)

Nasdaq 4H Chart

Nasdaq 2001 — Nasdaq (CFD) 4H Chart – January 20, 2026 – Source: TradingView

As indicated in our Friday Index analysis, Nasdaq is remaining in a large range between 24,500 and 25,800 since End-November.

Now reacting strongly to its 25,000 Mini-Support Zone, bulls will want to confirm the range by retesting at least its newly formed Downward Channel highs (around 25,500).

With the 4H 50 and 200-period MAs acting as resistances there, a push beyond would relaunch the Nasdaq to some new highs.

Failing to do so could see further profit-taking/ rangebound price action for the Index.

Nasdaq technical levels of interest:

Resistance Levels

Momentum Pivot 25,200 to 25,500 +/- 75 pts
4H MA 50 and 200 at ~25,500
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 24,977
24,500 Main support
Early 2025 ATH at 22,000 to 22,229 Support

S&P 500 4H Chart

sp500 1601 — S&P 500 (CFD) 4H Chart – January 16, 2026 – Source: TradingView

The Spoose was showing strong resilience, looking the most favorable technically to its peers.

However, things have changed as the Triangle Formation presented on Friday has been broken to the downside, and today's rebound is seeing harsh rejection at its 6,880 Momentum Pivot – The Outlook for the S&P 500 is now bearish.

The 4H MA 200 (6,887) will act as Major resistance.

Breaking back above brings back bullish hopes
A rejection there however could quickly lead to a test of the Mid-December lows at 6,729.
- Watch the latest headlines to see if they corroborate with more uncertainty or an actual TACO (which would be bullish)

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

Session lows 6,820
6,800 Psychological Support
Support 6,720 to 6,750 at Mid-December lows at 6,729
6,400 Major psychological support

Safe Trades!

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