Following the hotter-than-expected January 2026 CPI report released last week, we saw Emini S&P futures break below the minor support at 6920. The market then hit our downside target and support area of 6860/6850, making a low just below there. We have yet to see any meaningful recovery from this level.
This 6850 level is an important line for trading in the coming days, and any long positions need stops placed below 6830. The market seems to be pricing in the Federal Reserve’s recent signal to delay rate cuts, a sentiment we haven’t seen since the supply chain scare of Q3 2025. A weekly close below 6830 would be a sell signal, targeting a retest of last week’s low at 6752.
Key Levels And Near Term Signals
If that weakness continues, we should watch for strong support at 6700/6730 for a potential buying opportunity. This area represents a more significant long-term value zone. For now, any longs taken at 6850 should look to take profits around the 6920/6925 resistance level before the weekend.
The Nasdaq has been hit harder, which is typical when interest rate fears resurface. The break above 25390 was a false start, reversing hard and breaking support at 24900. The selling triggered stops below 24800 and is now approaching our initial target of 24690/630.
Further losses are possible, especially with unemployment holding steady at a low 3.7%, giving the Fed little reason to ease policy. This could push the index down to its 18-month trend line support at 24500. Longs there need stops below 25300.
Should that trend line fail, there is excellent longer-term support between 24000 and 24200. This zone offers a strong chance for a significant bounce in the coming weeks. However, given the break lower, any short-term gains are likely to be limited by resistance at 25100/25200.
