Traders are looking for direction – Dow Jones and US Index Outlook

Ben Graham · February 17

US Stock Benchmarks are starting the week confused, looking for direction
With no major US data until Friday's PCE, traders will be looking at geopolitics to guide sentiment
Exploring Technical Levels for the Dow Jones, Nasdaq and S&P 500

US traders just came back from a long weekend break after yesterday's President's Day celebrations.

Last week concluded a bizarre week, with a very positive CPI report not materializing into a full-on rebound for equities.

As a matter of fact, the Dow Jones broke back below 50,000; tech stocks are still under heavy pressure, and overall, Stock Markets have been directionless for the past three months.

Directionless doesn't mean a Market top, but what stands out from recent weeks' action is that investors will really need a concrete shift in sentiment before Indexes can start heading to new highs again.

A recent Bank of America Survey still points to heavy positioning and low cash holdings among Asset Managers (implying that the bullet clips are close to empty).

Yet, Indexes remain well within 10% of their all-time highs and have resisted the large waves of outflows in the AI/Tech sectors.

Traders are looking for direction – Dow Jones and US Index Outlook - ExpertFX School — US per Sector Performance since 2026 – Source: TradingView

With the current session forming daily Dojis and overall trading unchanged across all US Indexes (except Nasdaq, down a modest 0.30%), the current signal is one of confusion.

US rates are not expected to change until at least the May meeting. Participants are still awaiting Kevin Warsh's views, and the Tariff decision (expected to be rejected by the Supreme Court) could significantly affect the current course of action.

Holding well despite uncertainty is a sign of relative strength, but it can quickly be overturned by worsening news. Keep a very close eye on new data from the US; geopolitics seems to be stabilizing, but remains a volatility factor.

This screams for range-bound action until we learn more.

Dive into today’s session charts and key trading levels for the major US indices: the Dow Jones, Nasdaq, and S&P 500.

Dow Jones 4H Chart and Trading Levels

The Dow has now been holding within a tight range for the past 4 sessions which provides traders with clear breakout boundaries.

A break and close above the 4H 50-period Moving average (49,775) would confirm a return above the 50,000 and should relaunch prospects for continued all-time highs
A break and close below the 200 MA (49,257) however would lead to a retest of the broader range lows around 48,000.

Dow Jones technical levels for trading:

Resistance Levels

January highs Key Pivot 49,500 to 49,700 (4H 50 MA)
Intraday Resistance 50,250 (rejecting)
ATH resistance 50,400 to 50,500
Index All-Time highs 50,512

Support Levels

4H 200 MA 49,250
Major Support – 49,000
Past week Support 48,600 to 48,700
Key Support around 47,500
45,000 psychological level (Main Support on higher timeframe)

Nasdaq 4H Chart and Trading Levels

It is difficult to remain as bearish on the Nasdaq when it really remains so resilient.

Now forming the basis of a double bottom at its key support, and the RSI turning higher, it seems that bears are now getting quite exhausted.

The path of least resistance now seems to be at least for a retest of the pivot zone at 25,000 and could extend to its 4H 200-MA (25,400).

Bears will want too see a clean break and close below 24,000.

Nasdaq technical levels of interest:

Resistance Levels

25,400 to 25,500 Key intraday resistance (2H 200 MA)
Pivotal Resistance 25,700 to 25,850
26,246 FOMC highs
All-time high resistance zone 26,100 to 26,300

Support Levels

24,500 to 25,600 Key Support (current rebound)
February 5 lows 24,165
October - November Support 23,800 to 24,000
Early 2025 ATH at 22,000 to 22,229 Support

S&P 500 4H Chart and Trading Levels

The S&P 500 has been holding one of the cleanest range seen in ages in Equity benchmarks and is currently standing at its lows, prompting similar views as in the Nasdaq. (I hope some traders caught our early call for rangebound conditions)

A test of its 50 and 200 Moving Averages (around 6,920) will come as a final line for bears to turn the consolidation into something materially subject to downward continuation, if not, expect the 6,750 to 7,000 range to hold until traders receive more news.

S&P 500 technical levels of interest:

Resistance Levels

Previous ATH Resistance 6,945 to 6,975 (Rejecting)
Session top 6,996
Current ATH 7,020
All-time High Resistance 7,000 to 7,020 (range highs)

Support Levels

6,920 Session lows and 2H MA 50/200 (key barometer)
Pivotal Support Zone 6,880 to 6,900
Mini-Support 6,830 to 6,850
6,800 Psychological Support
Overnight lows 6,735 (range lows)
6,400 Major psychological support

Safe Trades and keep a close eye on the US-Iran developments!

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