Yields continued their rally today with the 10 year treasury yield breaking above 5.30% again and breaking above last week's highs. However markets ignored it and continued to rally with tech leading again as the Nasdaq gained 1.05% and hit a new all time high. The S&P closed up 0.66% and even the rate sensitive Russell 2000 finished higher by 0.50%. Spot VIX was green all day today throughout the market rally while VIX futures were slightly lower. Spot VIX did finish at the lows of the day, but posted a gain of 1.40%.
For tomorrow nothing changes on a daily time frame on the Nasdaq as it continues to trade within its big primary uptrend (white). This uptrend will continue to be the only resistance level to watch at 27,875-27,900 on another rally attempt tomorrow.
On a pullback, its primary uptrend (white) will also be the first support to watch from the bottom end of the range around 26,650 which is about 3% away so it will likely be the only support that comes into play if we were to get a large sell-off. On the off chance that it were to break through it, there would be more just under it at 26,525-26,550 from its prior downtrend (blue).
The S&P opened below its previous primary uptrend that it started on Friday which was expected. It did break back above it at the 7,780-7,785 level as it hit a high of 7,794.35, but it closed back below it at 7,773.95. Since it did make a higher high, it still starts a new primary uptrend (white) for tomorrow.
I entered SPY put spreads in the afternoon today around 7,780 S&P as it was testing that primary daily uptrend resistance and I wanted to see a close below this area to hold overnight - which I did. For tomorrow, it will have several daily resistances just above it at 7,788-7,789 from its prior uptrend (yellow) which it did break above today, but it hasn't invalidated it yet. After that, its next uptrend (orange) will be resistance at 7,800-7,805 followed by the next uptrend (blue) at 7,810-7,815. The last daily resistance to watch would be at about 7,820 from its new primary uptrend (white). It will also have weekly resistance at 7,815-7,820 (see the weekly update). So this is going to be a big area to watch with several daily/weekly resistances coming up.
On a pullback, which I believe is the more likely scenario here, the first support to watch will be at about 7,720 from its prior downtrend (green). After that, its new primary uptrend (white) would be the next support at 7,689-7,690. If this doesn't hold, it would have more supports just below that at 7,685-7,687 (blue) and 7,678-7,680 (orange).
The Russell 2000 continues to trade within its big primary downtrend, so it doesn't start any new daily ranges again for tomorrow. This will continue to be the only daily resistance to watch and that will now be down to about 2,880 for tomorrow which is only about 1% away now. As I noted in previous updates, it was more likely to test the top of the range as that continued to get closer while price chopped around. The bottom of this same range will be the only support level to watch around 2,700, however this is over 5% away and is unlikely to be tested.
