Markets continued their rally back today with tech leading as the Nasdaq closed up 0.83% near the highs of day and the S&P and Russell 2000 both gained about 0.60%. The VIX also continued its decline, losing another 7.4% to finish at $19.49. This was its first close below $20 since February 27th. Tomorrow morning we will get month over month CPI data and will get a glimpse of how the recent surge in oil prices has affected it. As of right now there are no rate cuts being priced in until mid-2027. However, in yesterday's Fed minutes, Fed officials said that they still expect one cut in 2026. We'll have to see how tomorrow's CPI report moves rate markets.
The Nasdaq opened below yesterday's primary uptrend support but finished strong and still starts a new uptrend as it has been making higher highs. For tomorrow, the first key level to watch will be at 22,910 from its prior uptrend (yellow). It will likely open below this level tomorrow as it closed at 22,822 today, but it could potential gap above it on the CPI report. If it does open above it, then that level will become support, otherwise it will act as resistance. If it gaps or breaks through it, then the next resistance to watch will be at 23,125 from its purple trend and its last resistance would be at 23,240 from its new primary uptrend (white).
On a pullback, the first support to watch will be from its prior uptrend (blue) which will be right around 22,700 tomorrow. If it breaks through that and we get a larger sell-off then its purple sideways trend would be the next support to watch at 22,290. After that, its primary uptrend (white) comes into play again at 22,250.
The S&P also opened below yesterday's primary uptrend support, but also starts a new uptrend as it continues to make higher highs. It did pull back in the morning to its first support that I mentioned in yesterday's update at 6,759-6,760 (low of 6,761.55) which held. It didn't break through that support so it remains valid support for now and that will again be the first trend to watch tomorrow which will be support at about 6,790 (yellow). Its first resistance will be at 6,847 from its purple uptrend. If it were to gap above this, then it would become support. Its last resistance level to watch will be from its new primary uptrend (white) at 6,885.
If there is a big sell-off and the first support (yellow) at 6,790 doesn't hold, then the next level to watch will be at 6,670-6,675. This would be support from both its prior uptrend (purple) and its new primary uptrend (white).
The Russell 2000 did not break through its primary uptrend today so it doesn't start any new trends for tomorrow. For now its first resistance level will be at 2,649 from its prior uptrend (purple). If it gaps above it, that level becomes support, and the next resistance to watch will be from its primary uptrend (white) at 2,683. On a pullback, its primary uptrend would also be the first support to watch at 2,586 and then its prior uptrend (purple) comes into play again at 2,582. Those are the only two valid daily trends left for now.
