The markets gapped up this morning after Micron's blowout quarter and a cooler than expected PCE report this morning. The headline index rose 0.4% in May vs the 0.5% expectation which helped boost futures further this morning, but the rest of the PCE data was in-line with expectations. While Micron's big rally helped semiconductors, most other tech sold off including the hyperscalers. There was a stark difference between the Nasdaq Composite which closed down 0.46% and the Nasdaq 100 (NDX) which closed up 0.75%. This is because money continues to rotate into semiconductors like Micron and out of the mega caps like Apple which was down over 6% today. Meanwhile the Russell 2000 hit another new all time high and finished the day up 0.71% while the S&P finished flat. The VIX also rose a bit, closing up 1.4% at $18.89.
The Nasdaq remained well within its primary downtrend today so it doesn't start any new ranges for tomorrow. The first support to watch on a continued pullback will be from its prior sideways range (purple) at 25,250-25,260. It would also be support from the bottom of the range at about 24,875. If that doesn't hold, the last daily support to watch will be from its primary downtrend (white) at about 24,350.
On a rally, the first resistance to watch will be from its prior uptrend (yellow) at about 26,180 and the last resistance to watch will be from its primary downtrend (white) at about 26,250. All of these levels are pretty far so it's more likely that it simply continues to trade within its primary range for now.
The S&P similarly remains well within its primary range so it doesn't start any new trends for tomorrow either. The first support to watch will again be from its prior uptrend (blue) at about 7,355 which is just below today's close of 7,357. If it gaps below the 7,355 level tomorrow, that area will become resistance. But, as long as it opens over it, it will remain as support. From there on a rally attempt the next resistance to watch will be from its primary downtrend (white) at 7,480-7,485 followed by its prior uptrend (orange) at about 7,495.
On a continuation of this pullback, the first support will remain at 7,355 (blue). However if it gaps or breaks below it, the next support will be at about 7,150 from its prior sideways range (purple) followed by its primary downtrend (white) at 7,135-7,140 and its last support would be from its prior downtrend (yellow) at 7,130. So there will be several supports to watch between 7,130-7,150.
The Russell 2000 got the gap above its primary uptrend this morning and held it on a retest at that 2,986-2,987 level today. It hit a low of 2,989.20, so it didn't break through it which means it also doesn't start any new trends for tomorrow.
This primary uptrend (white) will again be the only level to watch for tomorrow. That trend will be support/resistance at about 3,003 which is just under today's close of 3,007. So if it can continue to open above it, then it will remain as support. But if it gaps or breaks below it, it will start a new trend and we'll have to wait and see how it closes to determine the direction of that new trend.
