Wall Street is trading with caution midday after the June nonfarm payrolls report came in well below expectations, just 57K jobs added versus the ~115K consensus estimate. Futures initially rose as markets processed the data as dovish for the Federal Reserve, pushing rate-hike expectations further out. But as the session unfolds, a more complex technical picture is coming into view.
The Jobs Report's Impact
The weak print is a textbook "bad news is good news" scenario for equities: it cools September rate-hike expectations and pushes any tightening further toward December. The 10-year Treasury yield edged lower, and the U.S. Dollar Index pulled back for a third consecutive session.
But labor market weakness also raises questions about consumer spending and corporate profitability, particularly for discretionary sectors. The result is mixed action across the major indices.
Dow's False Breakout, Still in Play
Technical analysts are circling back to a warning from Martin Pring at StockCharts roughly two weeks ago, who flagged a failed upside breakout in the Dow Jones Industrial Average. After staging a breakout above a secondary resistance line, the index reversed sharply, forming a classic bull trap pattern. RSI divergence confirmed the warning: June's high was not accompanied by momentum confirmation.
The critical line, per Pring, is that the primary uptrend has not yet been broken, but the warning deserves attention, especially ahead of a shortened trading session ahead of the U.S. Independence Day holiday.
NVDA Challenges Critical Support, The Day's Key Level
NVIDIA, the momentum leader in tech, is drawing the most attention from technical traders. The stock has pulled back to the $194-$195 area after losing the $197 level and failing to reclaim it. Analysts identify critical support at $191-$193, holding this level could allow a recovery toward $200 and above, while a breakdown could accelerate losses toward $188-$190.
This move follows broader technical analysis flagging a potential false breakout in NVDA's recent price action and the formation of a topping pattern.
What Technical Analysts Are Saying
Asaf Naamani, a prominent voice in the daily technical conversation, noted in recent posts that many stocks have completed Wave 4 corrections and are beginning to build Wave 5 advances, while emphasizing risk management and cash reserves. He reported maintaining roughly 50% cash in his active trading account.
The broader conversation also highlights the negative pattern in the Dow, gold holding above $4,000 on dollar weakness, and the lingering geopolitical uncertainty around U.S.-Iran tensions that continues to support commodities.
Key Levels
S&P 500 (SPX): Immediate resistance at 7,523-7,540, with key zones at 7,560 and 7,600. Support at 7,461-7,478, with the 50-day MA at 7,417 below.
Nasdaq 100 (QQQ): The recent positive momentum is being tested. Resistance at 729-730, support at 719-722. Semiconductor weakness is dragging the index lower.
NVDA: The $191-$193 zone is critical support. Resistance at $197-$200. RSI in the 37-40 range suggests near-oversold conditions.
Dollar (DXY): At 101.5, down for a third straight session. Support at 101.00-100.53, resistance at 101.80-102.00.
Gold: $4,030/oz, supported by geopolitics and dollar weakness. Support at $3,959-$3,900, resistance at $4,064-$4,100.
The Bottom Line
The weak jobs report shifted the monetary picture in the market's favor, but significant technical question marks remain. A false breakout in the Dow, NVDA battling critical support, and tech momentum fading all create an uncertain backdrop. With reduced liquidity ahead of the holiday and earnings season just two weeks out, analysts are marking the coming sessions as a pivotal inflection point for the market's next direction.
