Futures had a sharp selloff last night with Nasdsaq (NQ) futures falling as much as 1.8% while Russell 2000 (RTY) futures were down 1.9% and S&P futures fell 1.4%. But the markets recovered most of the losses by the open, and ended up rallying which was led by small caps. The Russell 2000 closed up 1.02% while the Nasdsaq jumped 0.73% followed by the S&P which posted a gain of 0.54%. The VIX gave back all of last week's gains and closed down 6.3% at $16.34. In the afternoon there was news of a trade deal between the U.S. and India where President Trump said that the U.S. would be reducing tariffs on India to 18% from 25% and India would also be reducing its tariffs which also helped the market rally.
Looking at technical levels for tomorrow, the Nasdaq put in another failed daily breakdown today which now starts a new sideways range for it which is also much smaller than its prior ranges. Its prior uptrend supports are also still valid support/resistances for now and those will be the first levels to watch tomorrow. The 23,590-23,600 level will be support/resistance from both of its prior uptrends that it broke through today (yellow and blue). The Nasdaq closed at 23,592 which is going to be right at this level tomorrow. So it's essentially a toss up whether it opens above or below it tomorrow for those levels to be support or resistance (support if it opens above them and resistance if it opens below). The next resistance level to watch will be at the top of this new sideways range (white) which will be just below 23,700. Support from this same range on a pullback will be at 23,360.
The S&P traded between support and resistance levels that I mentioned in the prior daily update. It didn't break through its primary uptrend support so it does not start any new trends for tomorrow. It held its failed breakdown retest (yellow) at the open again which was around 6,910 today and it also got rejected at its prior sideways channel (purple) around 6,990. Both levels remain valid since it did not clear through either of them. So, resistance will continue to be around this 6,990 level for tomorrow from this same sideways range. Support on a pullback will be at about 6,925 (yellow) from last week's failed breakdown retest as well as 6,905 from it primary uptrend (white).
The Russell 2000 broke and closed above its primary downtrend today, this now starts a new uptrend for it going into tomorrow. The prior downtrends will act as support now as long as it doesn't gap back below them. The first support will be at about 2,630 (purple) followed by 2,620 (yellow) which are the two prior downtrends. If those don't hold, then the new uptrend (white) will be support at about 2,608. Meanwhile, resistance to watch will be from its new uptrend at about 2,660.
