Small caps were strong today as IWM hit new all time highs and closed up 1.09% while QQQ was very weak and closed down 0.59%. SPY also lagged, but finished flat on the day - closing down 0.01%. It was a clear rotation day and some of the semis cooled off as well as the memory names which have been practically straight up over the past couple of weeks. Tomorrow there is a big Supreme Court ruling on the legality of the Trump tariffs, which could have a big impact on markets. Right now on betting markets (Polymarket and Kalshi) there is about a 75% chance that the Supreme Court will rule that they are illegal. So we could be in for some interesting volatility tomorrow.
Looking at the daily technicals, IWM put in another failed breakdown today with a very strong finish. It opened lower this morning below its $255.50 uptrend support, but broke through it quickly and closed well above it at $258.27. With this failed breakdown it starts a new uptrend and now there will be support at about $257.40 from the retest of the failed breakdown - assuming there is no gap below it. If it gaps below or breaks through it after the open, then the new uptrend support will be at about $255.85. Meanwhile resistance from the new uptrend will be at about $260.50 for tomorrow.
QQQ gapped down about $1 this morning and opened well below its uptrend supports mentioned in yesterday's update after yesterday's weak finish. It did recover off of the lows somewhat, but it was still a pretty weak finish. With the close below the prior uptrends (see yesterday's update), it does start a new trend which is still higher. However, due to the weak finish it will likely open below this new uptrend tomorrow as well. Support from this new uptrend will be just below $622 tomorrow (around $621.90) so it would have to gap up above the $622 area to potentially hold this uptrend. It can still open below it and reclaim that support if it were to break and close above it tomorrow, but an open below it means the $622 area becomes resistance. And if it does close below this support tomorrow then it will start a new daily downtrend going into next week.
Lastly, SPY was flat today so nothing really changes again for it. It didn't break through any supports so the two uptrends it has been in recently stay the same. Its first daily uptrend support from the retest of last week's failed breakdown (purple channel) will be at about $685.40 for tomorrow. After that, the new uptrend support will be around $684.25.
