AMD fell over 17% today after reporting earnings last night, posting its biggest one day loss since 2017. Their report took the entire semiconductor sector lower as the SOXX (semiconductor ETF) closed down 4.4%. This also hit the Nasdaq hard again as it closed down 1.51%, leading the way lower for markets. The Russell 2000 also gave back yesterday's gains and then some as it closed down 0.9% while the S&P closed down 0.51%. Markets did recover some off of the lows today, and Google reported earnings after the close which is helping semiconductors as they said that they plan to spend $185 billion in capex this year which is almost double last year's spend. This is sending semis higher after hours with Broadcom (AVGO) up nearly 6% and Nvidia (NVDA) up 2% along with some other semis with the SOXX up 1.4% in after hours trade. However, Google's stock is relatively flat on its report.
The markets also sold off on news of the Iran nuclear talks collapsing. This sent markets sharply lower intraday and the VIX spiked as much as 18%, but there was a big fade as it only closed up 3.56%. But today's highs were the highest levels for the VIX since late November and volatility remains elevated.
With today's selloff there was some technical damage done. The Nasdaq broke through a key support level at 23,000 which was both daily and weekly supports for it. It also closed below daily support today which starts a new downtrend for it going into tomorrow. We'll have to see if it can rally back by Friday to reclaim the 23,000 level and close back over weekly support. For now, let's take a look at the daily levels for tomorrow.
The first big level to watch for tomorrow will be at about 22,840 which will be support/resistance from the new downtrend that it started today. The Nasdaq closed at 22,904 today and it is higher after hours right now with semis higher on the Google report, so odds are that it will open above this level, though t's very early and the current after hours gains could very easily be erased overnight. But as long as this holds and it opens above the 22,840 level then that area will act as support. If it fails to open above it, then the next support would be down around 22,200 from the new downtrend (white). On a bounce, the first resistance to watch will be at its prior sideways range (yellow) which is at about 23,040. If it breaks through this level, then the next resistance would be at about 23,370 from its next sideways range (purple).
There was also some damage done on the S&P today as it broke through 6,860 which was both daily and monthly support that it bounced off of yesterday. It did closed back over that daily support today to put in a failed breakdown, but it wasn't a strong finish and because it made a lower low today it still starts a new downtrend. It's too early in the month to know if it will close back over the 6,860 area by the end of February so we'll have to wait and see for that for the new monthly trend.
The first daily support to watch for tomorrow will be at about 6,857. This will be retest support from today's failed breakdown (blue). The next support to watch will be at 6,815 from the new downtrend (white) and the last daily support to watch will be at about 6,793 from the prior sideways range (purple) that is still valid support/resistance. Resistance levels on a bounce to watch will be at 6,930 from its prior uptrend (yellow) and then there will be more resistance from its new downtrend at 6,945.
The Russell 2000 failed to see any continuation of yesterday's strength and it broke through all off its daily supports. It did recover to close back above its prior uptrend support, so it does put in a failed breakdown. But it also was a really weak finish and since it made a lower low it starts a new downtrend - similar to the S&P. The first level to watch will be at 2,630 from its prior uptrend (purple). It closed at 2,624 today so unless it can gap back over that 2,630 level tomorrow, it will be resistance on a retest. From there, the next support will be at about 2,578 from its new downtrend (white). If it can gap or break above 2,630 tomorrow, then the next resistance level will be at 2,645 which will also be from its new downtrend. After that, its prior uptrend (purple) will be resistance at 2,690.
