The markets inched higher again this week with tech leading as the Nasdaq posted a weekly gain of 1.1% while the S&P and Russell 2000 both added 0.9%. The VIX also continued its decline as lost another 9% to close at $16.99 - its lowest weekly close since mid January. Most of the big tech earnings are out of the way and while there will still be a lot of companies reporting, the shift will likely focus to the upcoming jobs data. On Friday we will get the April employment situation report which will give us month-over-month nonfarm payrolls data as well as the unemployment rate. This will be the biggest data point for the week.
In last weekend's update I mentioned that the Nasdaq would almost certainly open below its primary uptrend around 25,225 which would then be resistance on a rally attempt. This is exactly what happened as it failed to get that big gap up, and the high of week was 25,223.12 as that 25,225 area acted as resistance. It also closed just below last week's primary uptrend, but since it made a higher high it still starts a new uptrend.
The first weekly level to watch for this week will be from its prior uptrend (orange) at 25,300-25,325. The Nasdaq closed the week out at 25,114, so it will need to gap up tomorrow above this 25,325 area in order for that prior trend to be support. That level is about 0.8% away and it's unlikely it will get a big enough gap up to do it. It is possible, but improbable. So it's likely that the 25,300-25,325 are will end up being resistance on a rally attempt. If it does gap above it, or break through it, then the last weekly resistance that will likely be in play will be from its new primary uptrend (white) at about 25,575.
On a pullback, its only support to watch will be from its new primary uptrend (white) which is at about 23,850-23,875. This level is around 5% away if it's tested this week. While there is room to pullback here, there's no guarantee it gets to the bottom of this range - and even if it does, there's no guarantee it happens all in one week. The longer it takes, the less downside there is. If it happens in the following week then its primary uptrend support will be at around 24,200-24,225 which is only about 3.5% away and so on.
The S&P also failed to gap above last week's primary uptrend and closed outside of it. But it also started a new uptrend as it has continued to make higher highs/lows. It's new primary uptrend (white) will now be the first resistance to watch at 7,335-7,340. It's unlikely to gap above this tomorrow as that level is about 1.4% away, but if it were to gap or break above it then the next big resistance will be from its prior uptrend (blue) at about 7,560. But I think it's extremely unlikely to test that this week.
On a pullback, which is the more likely scenario, its primary uptrend (white) will also be the first support to watch at 6,975-6,985. This is about a 3.5% pullback if it's tested this week. Again, just like with the Nasdaq there is no guarantee that it gets to this support in a week (if at all). If it happens over two weeks, then that support would be higher around 7,040-7,050 for the following week which would only be about 2.5% pullback.
Similar to the S&P and Nasdaq, the Russell 2000 opened and closed below last week's primary uptrend. But it also starts a weekly uptrend going into this week. Resistance from its new primary uptrend (white) will be at 2,865-2,870 this week. This is also going to be daily resistance tomorrow (see my daily update). This resistance is about 2% so it's also very unlikely that it gaps above it tomorrow. If it does gap above it, or breaks above it during the week, then the next weekly resistances will be at 2,945 (blue) and 2,960 (yellow).
On a pullback, its primary uptrend (white) will be the only support to watch for now. That will be at 2,695-2,700 this week which is about 4% away if it can get to the bottom of the range this week. If it happens over the next two weeks, then support from this range would be higher at about 2,720-2,725 for the following week which is about 3% away.
