Over the weekend President Trump announced he would be increasing the 10% global tariff to 15% which sent futures lower to start the week. Earlier this afternoon Anthropic announced a new Claude tool that can automate COBOL (common business-oriented language), which is used by companies like IBM and ACN. This sent both of their stocks lower today with IBM falling over 13% and ACN closing down nearly 7% and it sparked more AI fears in the software industry which has already been beaten down badly. IGV, one of the largest software ETFs, lost another 4.75% today and it broke below the 2025 tariff lows and IGV is now down about 35% from its September highs. Even with the carnage in software again, tech was not the worst performing. Small caps got hit the hardest with the Russell 2000 falling 1.61% while the Nasdaq closed down 1.13% and the S&P lost 1.04%. Meanwhile the VIX jumped another 10% to close at $21.01.
The Nasdaq did break and close below the daily uptrend support that it started on Friday which now starts a new trend for it which is still higher for now. The first resistance to watch tomorrow on a bounce will be at about 22,725-22,730 from its prior uptrend (blue) that it closed below today. If there is a larger snap-back rally tomorrow then the next resistance would be from the top of its new range (white) which is right around 23,000. On a continued pullback, the first support will be at about 22,380-22,390 from both its new uptrend (white) and its prior downtrend (yellow). There would also be more support at about 22,310 from another prior downtrend (purple).
The S&P this morning opened above its last daily downtrend that it started on Friday, but quickly reversed and closed well below it which gives it a failed breakout on the daily. It made a slightly higher high above Friday's high, so it does start a new slight uptrend here - but it's essentially a sideways trend. Now on the pullback it did hold its first big support at the 6,820 level from its prior downtrend (yellow) that I mentioned in Friday's update. So all of the same levels from the last update remain valid. The first support to watch tomorrow on a continued pullback will be from this same prior downtrend (yellow) that it bounced off of today. That support will now be at about 6,790 for tomorrow. If that does not hold, then its new range (white) will be support just below that at about 6,780. If that doesn't hold either, then the next support I'd be looking at is at about 6,737 from its prior downtrend (purple).
On a bounce, the first resistance I would be looking at is at about 6,877 which would be a retest of the failed breakout (blue) from today. I would look to take puts up here as well as long as it doesn't test supports first. If it does break through this retest, then the next resistance would be from its new range (white) at about 6,918 which is just above today's high.
The Russell 2000 broke through all of its prior uptrends and made a lower low which now gives it a new downtrend. Now the new downtrend support isn't far because this new range starts at today's low. So the next big support to watch tomorrow will be from this new range (white) at about 2,598 which is just below today's low of 2,600.99. Its prior uptrends are all still valid for now and these will be resistances now on a bounce. Those resistance levels will be at 2,645 (blue), 2,657 (orange), 2,665 (yellow), and finally its new downtrend (white) would be resistance at 2,677.
