Nvida erased its after hours gains from yesterday after they reported earnings and closed down 5.5% today, taking tech down with it as the Nasdaq closed down 1.18% while the S&P fell 0.54%. But, small caps were strong as we've seen rotations out of tech into the Russell 2000 consistently over the past couple of months rather than broad market sell-offs. We saw it again today as the Russell 2000 closed up 0.52%. Markets did recover off of their lows and the VIX gained 3.9%, which was well off of its highs of day. Tomorrow morning we will get PPI (Producer Price Index) data, another measure of inflation, and tomorrow will also be the final trading day for February which will set the tone going into March.
In yesterday's update I noted that the Nasdaq and S&P were both at the top of their new ranges and that it was likely that we'd get a pullback into the end of the week unless they gapped above those new resistances this morning, which they failed to do. With the pullback today, the Nasdaq got down near its new uptrend support but didn't break through it. That support was at about 22,640 for today and it got down to 22,670. It did break through its prior uptrends, so those are no longer valid. Now there is just this single uptrend for it on the daily time frame. Support from this uptrend will now be at about 22,690 for tomorrow while resistance from it will be around 23,280 if we were to see a snap-back rally.
The S&P also got the pullback that I was looking for, and it looks almost identical to the Nasdaq. It also did not break through its primary uptrend support (white), and that will continue to be support tomorrow at about 6,840. If it breaks through that, then its prior downtrend (purple) will be support at 6,820. Meanwhile if we get a rally going, its primary uptrend will be the key resistance level to watch at about 6,968.
The Russell 2000, which led today, closed above yesterday's primary downtrend resistance. This starts a new uptrend for it going into tomorrow. But it didn't close above its downtrend by much, and so there's risk of a gap down back under that resistance in which case it would remain as resistance. That first key level will be from yesterday's downtrend (blue) which will be at about 2,671-2,672. If it opens above it, then it will be support and vice versa if it gaps back under it. From there, the next resistance levels to watch will be from its prior uptrends at 2,685 (yellow) and 2,690 (purple). If there is a big rally then its new uptrend (white) would be resistance at about 2,747-2,748 but this is pretty far and is unlikely to happen. On a pullback, its new uptrend will also be the first support level to watch at 2,654. If there's a big sell-off again then its prior downtrend (blue) comes back into play as support at 2,592.
