This afternoon the Fed announced that they are leaving interest rates unchanged and markets initially rallied on this announcement as there were increasing odds of a potential rate hike over the past couple of weeks. However Kevin Warsh didn't provide much clarity during his presser and markets proceeded to sell-off sharply into the close. The Nasdaq underperformed once again, closing down 1.74%. Meta and Microsoft also reported earnings after the close, and Meta failed to provide strong guidance which is dragging it lower after hours by about 10%. Microsoft is higher by about 3% on its report, but tech is continuing lower in the after hours. The rate sensitive Russell 2000 was also weak today, closing down 1.61% as yields spiked after the Fed's interest rate decision. The 10 year treasury yield jumped back up near 4.7% at the highs. The S&P also closed down by 1.52% in what was a broad market sell-off. With the sharp move lower today, the VIX jumped about 13.5% to settle at $20.66 - its highest close since June 10th.
The Nasdaq failed to open above its primary downtrend from yesterday at that 24,875 level. It opened just below it this morning and did quickly break above it, but it failed to close above it giving it another failed breakout which starts a new downtrend for it. It did invalidate its prior big trends with today's volatility so now there are only two daily ranges to look at.
The first support to watch tomorrow will be from its new primary downtrend (white) at about 24,320. If that doesn't hold, the last support will be from its prior downtrend (purple) at about 24,190. On a bounce back, its prior downtrend (purple) will be the first resistance to watch at about 24,675. If it does break through this level, its last resistance will be from its primary downtrend (white) at about 24,950.
The S&P broke and closed well below the primary uptrend it had been trading in since early-June, so it finally starts a new trend here which is a sideways range. Its new primary sideways range (white) will be the first support to watch on a continued sell-off at 7,260-7,265 tomorrow. If that doesn't, its next two supports will be from its prior downtrend (yellow) at 7,205-7,210 and its prior sideways range (purple) at 7,150-7,175. On a rally attempt tomorrow, the only resistance to watch will be from its prior uptrend (blue) at 7,375-7,380 on a retest of today's breakdown.
The Russell 2000 also broke and closed below yesterday's primary trend support, starting a new downtrend for it. The first level to watch tomorrow will be from its prior downtrend (orange) at 2,905-2,906 which is right around today's close of 2,906. If it can open above it, then this level will act as support. From there on a bounce, the first resistance will be from its new primary downtrend (white) at 2,944-2,945. If it can break through it, the last two resistances to watch will be from its next downtrends at 2,953-2,954 (blue) and 2,961-2,962 (orange).
If the Russell fails to open above the first key level (orange) at 2,905-2,906, then this will be resistance as well. The next support to watch will be from its next downtrend (blue) at 2,899-2,900 which it could also potentially gap below - in which case it would become resistance as well. After that, its primary downtrend (white) will be the next support at 2,877-2,878. If this does not hold, the last support likely in play for tomorrow would be at 2,825-2,826 from its next downtrend (yellow).
