On Sunday night there was news that Federal prosecutors had opened a criminal investigation into Fed Chair Jerome Powell over the $2.5 billion renovation of the central bank's headquarters and his related testimony to congress. Powell also made a short video responding to this investigation, stating that the actual reason for this action was due to his feud with President Trump and him not lowering interest rates as much as Trump would like. This is the first real response that Powell has given regarding the tensions between him and Trump over the years. Futures sold off on these headlines overnight and markets gapped down to start the session, but they quickly reversed these losses in the morning and closed positive for the day. Small caps led the way higher again as IWM hit new all time highs and closed up 0.49%. QQQ and SPY were pretty flat with gains of 0.08% and 0.16%, respectively.
Looking at the daily charts for tomorrow, IWM held nearly all of its gains and broke through one of its prior uptrend supports on the gap down which makes it invalid now. It didn't break through its primary uptrend either way, so no new trends will be started, and it remains in 2 daily uptrends. The first support level to watch for tomorrow on any pullback will be at about $259.75 from its primary uptrend (white channel). After that, its previous uptrend (purple) will act as support at about $258.65. The next resistance level to watch will be at about $263.35 - also from its prior uptrend. It's also worth noting that IWM broke above its weekly resistance today which was at about $261.15 (see the weekly update for details).
QQQ opened below its prior uptrend support on the gap down this morning from Friday's failed breakdown, but it broke through it during the market rally back and closed above it. This makes that previous uptrend invalid now and so QQQ is now just in a single daily uptrend. So the support level to watch in its current uptrend will be at about $621.60 tomorrow - if we pullback. While resistance will be at about $633 in this uptrend. QQQ also did not break through its weekly uptrend support on the gap down this morning.
Lastly, SPY did not break through either of its big daily uptrend supports so it remains the same again with these 2 uptrends. It also did not break through weekly support on the gap down. So these rising supports to watch will now be at about $687.25 from the retest of the failed breakdown on January 2nd (purple channel). And then its new uptrend support will be at about $685.90.
