The NASDAQ index reached a peak of 207.30 points but has since decreased to approximately nine points or 0.06% at 17309.
The S&P index initially rose by 38.72 points but has now fallen by 15.04 points or 0.27% to 5596.
Nasdaq Holds Key Support Level
The NASDAQ is currently testing its 38.2% retracement level from the October 2024 low, positioned at 17278.18.
This level was effective in sustaining points from March 10 to March 14, and remaining above it may instill optimism among buyers for a potential rebound.
The current retracement level observed around 17278.18 serves as a point of reference for many market participants. Back in early March, it functioned as a dependable point of support, allowing the index to stabilise and build momentum briefly, before marching upward again. That the NASDAQ now hovers close above this line is not incidental—it’s something we have to treat with care. It is not simply another number on the chart; holding above it indicates that long positions, while recently pressured, might avoid steeper drawdowns for the moment.
Looking at what’s happened in today’s session, we can see that although both NASDAQ and the S&P puffed upward early on, much of those gains have since burned off. With the NASDAQ registering only a meagre net rise and the S&P now in the red, short-term sentiment appears shaky. For now, the retreat isn’t steep, but what’s more concerning is the lack of follow-through after earlier strength.
Market Sentiment And Trader Response
It’s important we recognise that indexes don’t just turn on a dime for no reason. What we’re seeing here is a struggle between those prepared to buy dips and those looking to trim exposure following this year’s run-up. The sharpest traders will not interpret this as a clear reversal—but nor will they assume the uptrend remains intact without scrutiny.
Powell’s remarks have added fuel in recent sessions, with clear messaging suggesting that while inflation remains a factor, the pace of hikes—or language hinting at pauses—means that fixed-income and equity derivatives markets are being tugged by competing expectations. We were watching closely, and it became evident that certain rate-sensitive assets reacted positively. But nothing followed with strength—there was no major rotation.
From here, derivative strategies must account for the possibility of a broader pullback should the retracement level fail. Staying above it is not a guarantee of bullish continuity, but slipping significantly below it, especially on strong volume, would invite more aggressive selling. Should that happen, sellers may attempt dragging prices toward the 50% retracement point next. Volatility would increase.
Options markets have not shown an unusual skew just yet, but spreads are beginning to widen, particularly in contracts expiring within the next fortnight. Traders can take that as a signal that nobody seems entirely comfortable. And when that’s the case, sharp moves in either direction remain a real possibility. For now, theta decay works against anyone simply waiting. Instead, any directional positions here ought to be paired with careful monitoring of daily closes relative to key support levels, particularly around today’s closing zone.
As pressure builds near a previously tested level, it invites reaction. That’s always been the behaviour. We’ll be watching volume flow, implied vols, and average true range closely in the coming sessions. There’s less patience across the board today for indecision, and range-bound strategies could be punished more than rewarded.
