US equity markets are catching a massive tailwind today as a "triple threat" of positive catalysts sends indices soaring. A significant miss in the US Consumer Price Index (CPI), coupled with resilient tech earnings, has forced short-sellers to retreat and invited buyers back into the fold.
Inflation Relief: US CPI cooled to 2.7% (vs. 3.1% expected), the lowest in months, fueling expectations for aggressive Fed rate cuts extending into 2026.
Tech Resilience: Stronger-than-expected earnings from the chip and AI sectors have stabilized the Nasdaq after a volatile week, proving there is still "heat" in the secular AI trade.
The Technical Pivot: Both the S&P 500 and Nasdaq are testing their 200-hour moving averages, a critical threshold that will determine if this is a relief rally or a full trend reversal.
Nasdaq Defends the "Golden" Retracement
The technical precision in the Nasdaq yesterday was a sight to behold for chart watchers. As the index slid toward the close, it hit the 38.2% Fibonacci retracement of the massive rally from the August lows to the October highs.
That level—22,698.34—was defended almost to the tick, with the session low reaching 22,693.37. This successful defense provided the springboard for today's massive "gap higher."
The Nasdaq’s 200-Hour MA Standoff
Despite the bullish gap, the Nasdaq has now reached a critical roadblock: the 200-hour moving average (23,115.86). Earlier this week, the price attempted to breach this level but was met with heavy selling pressure.
Traders now face a pivotal choice:
The Bullish Break: A sustained move above 23,115 shifts the focus to the 100-hour MA at 23,337.
The Bearish Lean: If sellers "lean" against the 200-hour MA again, we could see a rotation back down to fill the morning gap.
S&P 500: Buyers Take the Upper Hand
The S&P 500 is showing even more relative strength than its tech-heavy counterpart. Earlier in the session, it vaulted above its own 200-hour moving average (6,777.96) and has since moved significantly higher, currently up 1.3%.
For the S&P, the next major hurdle is the 100-hour moving average at 6,833.08. Getting and staying above that level would effectively neutralize the recent downside pressure and signal that the bulls are back in firm control of the broader market.
Watch the Video Analysis
In the video above, Greg Michalowski, author ofAttacking Currency Trends, provides a deep dive into the NASDAQ and S&P technical levels. He breaks down the real-time price action, helps you define bias, risk, and outlines the specific targets that will matter most for the remainder of the trading week.
Be aware. Be prepared.
