This morning we got more inflation data on the producer side with PPI data which came in cooler than expected. Month-over-month PPI was unchanged vs the estimate of +0.2% while annually it rose 4.7% vs the expectation for +4.9%. This along with oil pulling back 2.5% led to a pullback in yields which helped markets rally. Today's rally was led by tech as the Nasdaq gained 0.81% on the back of memory names like Sandisk which jumped nearly 14% today. The S&P added 0.65% and hit new all time highs, breaking above 7,800 for the first time. Despite the pullback in oil and yields today, small caps lagged as the Russell 2000 closed up just 0.24% and finished near the lows of day. The VIX was relatively unchanged, closing up 0.55% at $14.63.
The Nasdaq did fail to get the gap up above its prior uptrend (purple) that I talked about in yesterday's update, however it did have a strong rally which broke through it and invalidated that prior trend. It remained within its primary uptrend so it doesn't start any new ranges for tomorrow. Resistance will now be at 27,140-27,160 from both its primary uptrend (white) and prior uptrend (purple) on a continuation of this rally. On a pullback, these same two ranges will be the only ones to watch for now with support at about 26,540-26,560 from them.
The S&P also failed to get the gap above yesterday's primary uptrend, but it did have a strong rally as well and broke and closed above them giving it a failed breakdown which starts a new primary uptrend (white) for it. Its prior trends (orange and blue) will still be resistance for now on a rally attempt as it's likely that the S&P opens below them tomorrow. The first level to watch will be at about 7,823 (orange) followed by 7,830 (blue). Both of these are above today's close of about 7,799 so unless it can get that gap above them, they will be resistance on a rally attempt. If it can get the gap above them or simply break through them again, the last daily resistance will be from its new primary uptrend (white) at 7,842-7,843.
On a pullback, the first support to watch will also be from its new primary uptrend (white) at 7,789-7,790. If it were to gap below it then this level would become resistance as well. If it opens above it, but breaks down through it, then the next support in play on a pullback would be from its prior sideways range (yellow) at 7,650-7,655.
The Russell 2000 remained within its primary daily range so it doesn't start any new trends for tomorrow. The first resistance to watch on another rally attempt will be at about 3,076 from its prior uptrend (purple). If it can break through this level, the last resistance will be from its primary uptrend (white) at about 3,090.
On a pullback, the first support to watch would be from its primary uptrend (white) at 2,987-2,988. If it doesn't hold, its last daily support potentially in play for tomorrow would be from its prior downtrend (blue) at about 2,980.
