Dow futures have stayed over the 4-hour pivot of 48,852 for nine sessions, showing a stable trend. Prices are bouncing around between 49,564 and 50,004, indicating compression rather than growth. The volume profile shows that most January Points of Control have been revisited, except for the POC from January 13, located near the upper microband. This untested level suggests that the auction is still ongoing.

Market Focus

The emphasis is on how prices behave at these important levels instead of guessing the market’s direction. Denis Joeli Fatiaki shares insights from his trading and strategizing experience. The federal government’s budget deficit reached $144.75 billion in December, marking a record for that month and being 68% higher than in December 2024. At the same time, Pump.fun climbed nearly 5% after launching a new platform feature. The Orange Juice Newsletter offers daily market insights that stand apart from typical news. The article makes it clear that the views of FXStreet do not represent the author’s personal opinions or investment advice. The author takes no responsibility for the information’s accuracy or completeness and states they have no stake in the stocks mentioned. They also clarify that they are not a registered investment advisor.

Historical Context

Reflecting on early 2025, we observed Dow futures trapped in a narrow range just below 50,000. That period of compression, characterized by an unfinished auction, ultimately led to a strong upward movement for the rest of the year. We are now experiencing a similar phase of uncertainty, but at a higher level. Currently, the market is coiling again, staying above a pivot near 53,500 but having difficulty gaining momentum. The options market indicates minimal movement, with the CBOE Volatility Index (VIX) recently trading below 15, a calmness not witnessed since late 2025. This low volatility hints at complacency, suggesting that any breakout could happen quickly and dramatically. The broader economic landscape continues to be influenced by government spending. We have seen that the federal budget deficit for December 2025 hit $162 billion, exceeding last year’s record for the same month. This ongoing fiscal strain keeps inflation risks relevant and may complicate the Federal Reserve’s policies in the months ahead. As we look to the weeks ahead, we should stay ready for a decisive move from the current range. With low implied volatility, purchasing straddles or strangles could be an effective strategy to take advantage of a significant price change, no matter the direction. A strong break above 54,200 or below 53,500 on increased volume should signal the next big move. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now