The markets were essentially unchanged today with the Nasdaq and S&P posting gains of 0.07% and 0.02%, respectively, while the Russell 2000 closed down 0.02%. The VIX on the other hand fell 4.23% to finish at $16.29 - its lowest close since late January. Tomorrow we will get the latest batch of inflation data with PCE. The market expects month-over-month core PCE to increase by 0.3% with year-over-year up 3.3%.
This morning the Nasdaq bounced right off of its primary uptrend support that it started yesterday around 26,550 which I mentioned as the only support level that would be in play for today. After the initial bounce during the morning pullback, it did end up breaking just below it, but it closed back over it to put in a failed breakdown which starts a new uptrend for it.
As I've been mentioning in previous updates, the market needs to continue to gap up to open above the new uptrends that they continue to add. This is true again for tomorrow as the Nasdaq's new primary uptrend (white) will be at about 26,710 which is higher than today's close of 26,674. It will also have resistance at about 26,725 from its next uptrend (orange) which it reclaimed today. Unless the Nasdaq can once again get a gap up above these levels, they will act as resistance on a rally attempt. If it does gap or break above them, the next resistances to watch will be at 26,960 (purple), 27,020 (yellow) and finally its primary uptrend (white) at 27,075.
If it fails to get the gap up above those levels, or it breaks through them even with a gap up, then the next support to watch on a pullback will be at about 26,640 from its prior downtrend (blue). For now this is going to be the only support level in play. If it breaks/gaps below the primary uptrend then it will start a new trend heading into Friday, but we'll have to wait and see how it closes first.
The S&P had a similar failed breakdown which gives it a new uptrend, but it also needs to gap up to open above its new primary uptrend (white) tomorrow which will be at about 7,538. That's about 0.2% above today's close of 7,520. If it does get this gap up above 7,538, then that level will act as support on a pullback and the next resistance to watch will be at about 7,552 from today's failed breakdown retest (teal). If it can manage to gap above this level as well, then that would also be support. After that, its next resistances will be at 7,562 (orange), 7,583 (purple), 7,593 (yellow) and finally the top of its new primary range (white) at 7,617.
Now if the S&P fails to get the gap above its primary uptrend support at 7,538 tomorrow morning, then that will be the first resistance level to watch on a bounce attempt. On a pullback, the only support likely to be in play will be from its prior uptrend (orange) at about 7,477.
The Russell 2000 closed below yesterday's primary uptrend, but it made a higher high and still starts a new uptrend going into tomorrow's session. However, just like with the S&P and Nasdaq, it also needs to gap up again to open above its new primary uptrend (white) which will be at 2,932-2,933 tomorrow. This is about 0.4% away from today's close of 2,919.94. If it can get this gap up in the morning, then the 2,932-2,933 level will act as support on a pullback and the next resistance level to watch on a continuation of the rally will be at 2,968 from its prior uptrend (blue) which it closed below today. After that, there would be more at 2,982 (yellow) and the last resistance likely to be in play tomorrow would be at 2,994 from its primary uptrend (white).
If the Russell fails to gap above its primary uptrend at 2,932-2,933 tomorrow then that will act as resistance. Its next uptrend (yellow) will be at about 2,920 which is essentially where it closed today. If it opens above the 2,920 level then this will be support on a pullback. If the Russell opens below 2,920, then it will be resistance on a rally attempt as well. There's no other support in play below that right now. If it breaks down tomorrow, we'll have to wait to see how it closes to determine the direction of its new trend.
