Amazon reported earnings Thursday night which came in well above estimates on surprising strength from its cloud computing business. The stock jumped over 15% on the report as it inched towards all time highs again. Apple on the other hand fell over 7% on earnings, despite also topping estimates. The Nasdaq still led yesterday as it closed up 1% for the day while the S&P added 0.70%. Small caps lagged significantly with the Russell 2000 closing down 0.50%. The rate sensitive index struggled as treasury yields continued to climb higher. The 10 year yield hit a high of 7.74% and after the market closed there was a CBS report that said the U.S. and Israel were preparing attacks on energy related targets in Iran as soon as this weekend. This report sent oil spiking after hours and it settled up nearly 4% which also sent markets lower in after hours.
The Nasdaq did get the gap up it needed to open above its primary uptrend support, but it did break through it after the open. It did manage to close above it, so it puts in a failed breakdown on the daily which starts a new uptrend for it heading into Monday's session. The first resistance to watch on Monday will be at about 25,600 from yesterday's failed breakdown (blue). If it can break through it, the last daily resistance in play would be from its new primary uptrend (white) at about 25,650.
The first daily support to watch on a pullback will be from its new primary uptrend at about 25,200. If that doesn't hold, the only other daily support that likely comes into play for Monday would be from its prior downtrend (yellow) at about 24,740.
The S&P didn't break through any trends yesterday, so once again it doesn't start any new trends heading into Monday's session. The only daily resistance to watch for Monday will again be from its primary range (white) at about 7,585. On a pullback, the only support that will likely come into play would be from its prior uptrend (blue) at about 7,385.
The Russell 2000 had a failed breakout yesterday which starts another daily downtrend for it. The first level to watch for Monday will be its prior downtrend (teal) at about 2,925. It closed at 2,931 yesterday, so it if it can open above it on Monday then the 2,925 level will act as support. However it's possible that it does gap below it given the after hours action on Friday on the Iran news. If that happens, the 2,925 level becomes resistance. For now let's assume it does open above it and then the next resistance levels to watch on a rally attempt will be at 2,943 (blue), 2,946 (green), 2,951 (white - primary downtrend), and finally 2,954 from its last downtrend (orange). So even if it does open above the first key level at 2,925 it will have several other resistances to deal with.
If the Russell fails to open above the 2,925 level (teal) then this area becomes resistance along with all of the other levels mentioned above. From there on a continued pullback the first support to watch will be at 2,898-2,899 from its first downtrend (orange) which is what it bounced off of yesterday. If it doesn't hold this time, it will have several supports below that at 2,891 (white - primary downtrend) with more just below that at 2,888-2,889 from its next two downtrends (blue and green). If neither of those hold, the last daily support that likely comes into play for Monday would be at 2,858-2,859 from its next downtrend (teal).
