The markets recovered a bit today as oil fell over 4% and yields pulled back with the 10 year falling back to around 4.64%. Tech led the way with the Nasdaq closing up 0.66% while the Russell 2000 gained 0.50%. The S&P also closed higher by 0.32% and the VIX fell 2.5% to settle at $15.45. Tomorrow morning we will get the first big catalyst for the week with PCE data ahead of Kevin Warsh's Jackson Hole speech on Friday. After the close tomorrow we will also get Nvidia's earnings report which will broadly effect tech.
Today the Nasdaq did gap up above its primary downtrend, but it still starts a new primary downtrend with the recent lower lows that it has been making. For tomorrow, its new primary downtrend (white) will be the first key level to watch at about 26,170. That is just above today's close of 26,151. If it does gap above that 26,170 area tomorrow then it will act as support on a pullback. From there the only daily resistance to watch on a rally will be from its prior uptrend (blue) around 26,400.
If the Nasdaq fails to gap above its primary downtrend around 26,170 then this level will continue to act as resistance on a rally attempt. On another pullback, its first support will be from its next downtrend (orange) around 26,050. If it breaks through it, or potentially even gaps below it, then the next support to watch will be from its new primary downtrend (white) around 25,800. If that doesn't hold, it will have several supports just below it at 25,775-25,785 from its next 3 downtrends (red, green, and orange). That would be a big support area to watch where all 3 of those trends intersect.
The S&P also gapped above its previous primary downtrend and closed above it after an early retest right around 7,650 this morning which held. It now starts a new primary sideways trend (slight downtrend). The next resistance level to watch on a rally attempt will be at 7,700-7,705 from its prior downtrend (yellow). After that, its new primary sideways range (white) will be resistance at 7,740-7,745. If it breaks through this as well, the last daily resistance will be from its prior downtrend again (yellow - top of the range) at 7,755-7,757.
On a pullback, the first support to watch will be from its new primary range (white) at 7,637-7,638. If that doesn't hold, the next 2 supports will be at 7,620-7,625 from both of its prior downtrends (orange and blue). The last support potentially in play for tomorrow on a bigger sell-off would be from its prior sideways range (purple) at 7,585-7,590.
The Russell 2000 remained within its primary daily range again so once again it doesn't start any new daily ranges for tomorrow. On a rally, the only resistance that likely comes into play will be from its prior uptrend (orange) around 3,033.
On a pullback, its primary uptrend (white) will be the first daily support to watch at about 2,986. If that doesn't hold, its next daily support will be from its prior downtrend (blue) at about 2,975. Those would likely be the only 2 daily supports to get tested tomorrow. However, if they don't hold, its primary weekly uptrend (see the weekly update) would be the next support at about 2,955 on a sell-off.
