The selling continued overnight in Korea's KOSPI index with pressure on semiconductors as concerns around the AI trade mounted amid Coreweave's debt. Anthropic also announced their revenue which came in at $16.8B for the quarter, which futures sold off on as investors found it underwhelming and had concerns about them not growing fast enough. PPI data also came in hotter than expected this morning, but yields fell on it with the 10 year treasury yield falling back near 5%. The 10 year did recover off of its lows, but still fell nearly 2% for the day. The pullback in yields along with the rotation out of tech helped small caps lead today as the Russell 2000 jumped 1.38%. The rest of markets also recovered after the overnight losses with the S&P gaining 0.33% while the Nasdaq closed higher by 0.08%. The VIX briefly broke above $18 this morning, but finished at the lows, closing down 2.43% at $16.46.
This morning the Nasdaq gapped below yesterday's primary uptrend, but it rally back to close just above it. Since it made a lower low, it still starts a new downtrend. The good news is that it was a strong finish near the highs, and for tomorrow it just needs to avoid a gap back below its new primary downtrend (white) which will be around 26,540 tomorrow and that is about 0.65% away from today's close of 26,713. As long as it opens above it, this level will act as support on a pullback tomorrow. Its prior uptrend (green) will also act as support at about 26,690 which is just a hair below today's close, so there is more risk of a gap below this level. But, as long as it opens above it, it will also act as support. On a rally back tomorrow, the only daily resistance to watch will be at about 27,125 from its prior uptrend (orange).
Now if the Nasdaq does gap back down below the first 2 supports mentioned above (26,690 and 26,540), then they would act as resistance on a rally attempt. It could still break down through those levels even if it does open above them, and the next support to watch on another sell-off would then be from its prior downtrend (blue) at 26,050-26,075. If that doesn't hold, the last daily support to watch will be from the bottom of its new primary downtrend (white) right around 26,000.
The S&P also gapped just below its primary downtrend from yesterday, but also rallied back to close well above it. It was a much stronger finish than the Nasdaq, but it similarly made a lower low which starts a new primary downtrend for it as well. Its new primary downtrend (white) will be at 7,741-7,742 tomorrow which is just below today's close of 7,744.06. So unlike the Nasdaq, there's not a lot of cushion here and there is greater risk of a gap back below this new primary downtrend. However, as long as it does open above it, the 7,741-7,742 level will act as support. On a continuation of the bounce, the next resistance to watch will be just under 7,800 around 7,798 from its next downtrend (green). If it can break through that, the last resistance to watch will be at about 7,818 from its prior uptrend (yellow).
If the S&P does open a bit lower below the 7,741-7,742 level and its new primary downtrend (white) then this level will act as resistance and the next support to watch on another pullback would be at its prior uptrend (yellow) around 7,695. If that doesn't hold, its next downtrend (green) will be support at 7,681-7,682. After that will be its next downtrend (orange) at 7,655-7,657 and if this also breaks then the last daily support will be from the bottom of its new primary downtrend (white) at about 7,645.
The Russell 2000, which led today, remains in its big daily downtrend which continues to be the only daily range to watch for now. Resistance from the top of the range will be at 2,835-2,840 while support from the bottom of the range will be at 2,655-2,660.
