Charting a market whipsaw, Nasdaq aborbs Deepseek-fueled downdraft

Focus: U.S. benchmarks also weather tariff-related selling pressure

Technically speaking, the major U.S. benchmarks are off to a bullish 2025 start, though the prevailing backdrop is not one-size-fits-all.

On a headline basis, the S&P 500 is the lone U.S. benchmark to register a record high this year. Meanwhile, the Dow industrials have topped within 20 points of record territory while the Nasdaq Composite lags slightly behind. The charts below add color:

Editor’s Note: As always, updates can be directly accessed at chartingmarkets.substack.com.

Before detailing the U.S. markets’ wider view, the S&P 500’s hourly chart highlights the past four weeks.

As illustrated, the S&P 500 has weathered two recent market downdrafts — the Deepseek-fueled plunge (for lack of a better term) and the more recent tariff-driven downturn.

Amid the volatility, limited technical damage has been inflicted. The S&P remains within striking distance of record highs.

Meanwhile, the Dow Jones Industrial Average has strengthened slightly versus the other benchmarks.

As illustrated, the index has maintained a posture atop its 50-day moving average, holding relatively tightly to its range top. Bullish price action.

Against this backdrop, the Nasdaq Composite is traversing a comparably choppy one-month backdrop.

But here again, the index has absorbed the recent Deepseek downdraft, as well as the tariff-fueled plunge to start February.

Tactically, the 19,140-to-19,200 area marks increasingly significant support, an area also detailed below.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has asserted a jagged two-month range.

The range top matches its all-time high (20,204) established late last year. Conversely, the range bottom matches notable support — the 19,140-to-19,200 area — also detailed on the hourly chart.

Delving slightly deeper, the year-to-date low (18,831) marks an inflection point. The Nasdaq’s intermediate-term bias remains bullish barring a violation.

(Within the range, the Nasdaq has not strayed too far from its 50-day moving average, currently 19,594. The prevailing range is a bullish continuation pattern based on today’s backdrop.)

Looking elsewhere, the Dow Jones Industrial Average is holding its range top.

Tactically, resistance narrowly spans from 45,054 to 45,073 levels defining the 2025 peak and 2024 peak respectively. (Also see the hourly chart.)

More broadly, the prevailing upturn originates from the Dow’s four-month range bottom. The steep January rally, and subsequent flattish pullback, signal bullish momentum is intact laying the groundwork for a potential breakout.

Meanwhile, the S&P 500 is chopping around near record highs.

Here again, selling pressure near the range top has been muted — in the broad sweep — despite recent headline-grabbing market catalysts. (Deepseek- and tariff-related.)

Note the S&P has maintained its 50-day moving average (in blue) on a closing basis since the mid-January break higher.

The bigger picture

As detailed above, the major U.S. benchmarks are off to a bullish 2025 start, though the prevailing backdrop is not one-size-fits-all.

On a headline basis, the S&P 500 is the lone U.S. benchmark to register a record high this year. Meanwhile, the Dow industrials have topped within 20 points of record territory while the Nasdaq Composite lags slightly behind.

Moving to the small-caps, the iShares Russell 2000 ETF (IWM) is treading water amid a sluggish 2025 start.

But against this backdrop, the small-cap benchmark is pressing its 50-day moving average, a widely-tracked intermediate-term trending indicator. Recall the 50-day previously underpinned the late-2024 price action. (See the Oct. and Nov. lows.)

The prevailing upturn originates from a tight two-week range — a coiled spring — laying the groundwork for potentially decisive follow-through.

Meanwhile, the SPDR S&P MidCap 400 ETF (MDY) remains slightly stronger than the small-caps.

As illustrated, the mid-cap benchmark has maintained its January breakout point, rising from support on increased volume. Separately, the mid-caps have ventured atop the 50-day moving average in recent weeks, also outpacing the small-caps.

More broadly, the small- and mid-caps both maintained the 200-day moving average at the January low. The primary (longer-term) uptrends are intact.

Returning to the S&P 500, the index is acting well technically.

To start, the prevailing upturn originates from major support (5,775) a familiar bull-bear fulcrum. (See the Jan. 8 review.)

The subsequent pullback from record highs — though admittedly jagged — has been comparably flat. Limited technical damage has been inflicted even amid the recent Deepseek- and tariff-related downturns. (In both cases, the S&P has maintained its 50-day moving average on a closing basis.)

Tactically, the 50-day moving average, currently 6,000, is followed by support around 5,960, an area established amid the Deepseek downturn. (See the hourly chart.)

Delving deeper, the Fed-induced inflection point (5,872) is followed by last-ditch support at 5,775, an area matching the pre-election gap.

As always, it’s not just what the markets do, it’s how they do it.

But generally speaking, the S&P 500’s intermediate-term bias remains bullish barring a violation of the 5,775 area.

Also see Jan. 8: Charting market cross currents, U.S. benchmarks register jagged 2025 start.

Also see Jan. 24: Charting a slow-motion breakout attempt, S&P 500 edges to record highs.