This week was very quiet with markets pretty choppy all week. Wednesday's CPI report was in-line with estimates so it didn't move markets much. The Nasdaq and S&P did notch their third straight weekly gain with the Nasdaq gaining 1.5% while the S&P added about 0.4% and hit new all time highs. The Russell 2000 also hit new all time highs on Friday as the index gained 1.1% for the week. The VIX hit new lows for the year, closing at $14.25, which was also its lowest close of the year. It is also inching towards the 2025 low of $13.38. Next week there isn't much market moving economic data on tap so it may be another quiet week. We will get the FOMC minutes from the July meeting which may give more insight into what the Fed is thinking regarding interest rates, but it's usually not a big market mover.
In last week's weekly update I mentioned that there was a little room to pullback especially if there was a weaker open on Monday to start the week. The markets did have a slightly lower open and the Nasdaq did pull back just over 1% before the dip was bought. It also closed above its previous primary downtrend from last week which now starts a new primary uptrend for it. The problem is that it wasn't a strong enough finish and it will open below this new primary uptrend (white) on Monday as that level will be around 27,400 which is about 2.5% away from this week's close of 26,729. So for next week, the 27,375-27,400 area will be resistance on a rally attempt from both its primary uptrend (white) and its prior uptrend (yellow) where the two trends intersect.
On a pullback, the first support to watch will be at 26,575-26,600 from its prior downtrend (orange) that it closed above this week. This level is about 0.6% away so there could potentially be a gap below it on Monday in which case it would become resistance. If it were to gap or break below it, the next weekly support would be further away from its next downtrend (blue) around 25,575-25,600.
The S&P also got a bit of a pullback earlier in the week, but it didn't break through its primary uptrend so it doesn't start any new weekly trends for next week. It's in the same situation as the Nasdaq in that it won't gap above its current primary uptrend (white) which will be at about 7,895 next week. This is about 1.4% away from this week's close of 7,785 so while it is possible to get this gap up, it's extremely unlikely. So instead of its primary uptrend being support, the 7,895 area will be the only weekly resistance level to watch for next week.
On a pullback, the first support to watch will be from its previous uptrend (purple) at 7,762-7,763 with its next support at about 7,740 from its next uptrend (yellow). If it were to gap below either of these levels they would then become resistance. The next supports would be from these same two prior uptrends (bottom of the ranges) at about 7,370 and 7,350 which are very far away and unlikely to be tested. Instead, the S&P will likely just start a new primary range but we'll first need to see how it closes to determine the direction of it.
The Russell 2000 also remained within its primary uptrend this week, so it doesn't start any new weekly ranges here either. For next week, the first two resistance levels to watch will be at about 3,070 and 3,077 from both of its prior uptrends (yellow and blue). The Russell 2000 closed at 3,068 which is just below those two levels. It opened below them last week and rallied to break through them, but it hasn't invalidated them yet. It could do the same this week and then the last weekly resistance to watch would be from its primary uptrend (white) at 3,135-3,140. If it potentially gaps above those first two trends (yellow and blue) they would become support.
On a pullback, the first support to watch will be at 3,038-3,039 from its next uptrend (orange) which it bounced off of this week. If it doesn't hold this time, the next support will be at 3,016-3,017 (teal). Finally, it's last weekly support would be from its primary uptrend (white) at 2,940-2,945 if we were to get a larger pullback next week.
