On Friday morning President Trump nominated Kevin Warsh to be the next Fed Chair, replacing current Fed Chair Jerome Powell. This nomination has been seen with mixed views as Trump has been pushing for more rate cuts, however historically Kevin Warsh has been hawkish and has been focused on controlling inflation and has been against aggressive monetary policies like QE (quantitative easing). This nomination finally provided some relief for the U.S. Dollar as it rallied nearly 1% on Friday which also helped spur the selloff in metals. Silver fell as much as 36% on Friday, its biggest one day selloff since 1921. Meanwhile Gold fell as much as 13%. Both of these moves were extraordinary, but keep in mind they have also had parabolic moves to the upside. The markets also fell with small caps leading the way lower as the Russell 2000 closed down 1.55%. This may also have been a sign of Kevin Warsh being the wrong pick for rate cuts, as a more dovish nomination would have potentially provided a rally for small caps - indicating cuts will be coming faster. The Nasdaq also fell 0.94% while the S&P fell 0.43% and was the relative outperformer.
Looking at Monday's levels, the Nasdaq did bounce right around its new daily uptrend support. It was a slight break through it and it closed back over it which starts a new daily uptrend for it. But, it was not a strong finish and it could gap below these uptrend supports tomorrow. The level to watch will be at about 23,470-23,475 which is support/resistance (depending on where it opens) from both the prior uptrend (blue) and the new uptrend (white). It closed at 23,461 on Friday, so it would need a tiny gap up tomorrow to open above that level. If it gaps up tomorrow above it then that area becomes support while an open below it means it will be resistance. The next support level to watch for tomorrow would be at about 23,015 from the prior uptrend (purple) if we continue this sell off. This same trend would be resistance on a rally at about 23,840.
The S&P bounced right around its retest support (yellow) from Friday that I mentioned in the last daily update. It did not break through its new daily uptrend (white) so it doesn't start any new trends for tomorrow, and all of its current trends remain valid for now. So the support levels to watch for tomorrow will be at about 6,910 (yellow) which is its prior failed breakdown support and then about 6,895 from the new uptrend (white). If it were to break or gap below these levels on a big sell off, then the next level to watch would be at about 6,792 from the prior sideways (purple) trend. Meanwhile on a rally, the resistance level to watch will be at about 6,990 again from the same sideways trend and failed daily breakout from Wednesday. If there's a larger rally above that, then the next resistances would be at about 7,037 (white) and 7,043 (yellow) which would be new all time highs for it.
Lastly, for the Russell 2000, it put in another failed breakdown on the daily. However, it continues to make lower lows so the new trend it starts is going to be a new downtrend again. The levels to watch for tomorrow will be at about 2,588 from the failed breakdown retest (purple) with more support just below that at about 2,582 from the new downtrend (white). On a bounce, the first resistance to watch will be at about 2,635 from the new downtrend and then more at 2,644 from its prior downtrend.
