The markets continued their rally this week with tech leading the way higher as the Nasdaq jumped 1.05% while the S&P added 0.58% and the Russell 2000 closed higher by 0.27%. The VIX also fell again, losing 3.64% to settle at $16.68. After hours, Meta reported earnings after the close which came in above estimates and they also announced that they would be creating a new class of stock with no voting rights and that each shareholder would receive 1 share for every share that they currently own - effectively acting as a 2-for-1 stock split. Meta said that they would use the shares to raise cash to help fund AI, acquisitions, and other expenses. The stock is currently up about 3.5% on the report.
The Nasdaq gapped above yesterday's primary range and closed above it to start a new uptrend. The problem now is that it will need to gap up again to open above its new primary uptrend (white) which will be resistance at about 26,850. That is almost 0.6% away from today's close. There would also be more resistance just above it from its prior uptrend (teal) at about 28,865. So this area at 26,850-26,875 would be a big resistance level where those 2 trends intersect. If it does manage to gap above it, then that area would become support, or if it simply breaks through it - then the only other daily resistance to watch would be from the top of its new primary uptrend (white) at 27,250-27,275.
If the Nasdaq fails to get that gap up tomorrow above the 26,850-26,875 level and those first 2 resistances, then on a pullback the first support to watch will be from yesterday's primary range (peach) at about 26,575. If that doesn't hold, the last support that likely comes into play will be at about 26,425 from its next downtrend (light purple).
The S&P also gapped above the first key resistance level around 7,808 this morning which I noted would be the first big support to watch on a retest of yesterday's strong breakout. I entered SPY calls this morning near this support which held as it put in a low of 7,909.34, and took profits on the bounce. It didn't break through its primary uptrend (white) today, so it doesn't start any new trends for tomorrow. The top of its primary uptrend will be the only daily resistance level to watch again for tomorrow at 7,825-7,830 on another rally attempt.
On a pullback, the first support to watch will be from the bottom of its primary uptrend (white) at about 7,705. If that doesn't hold, the next support to watch will be from its prior downtrend (teal) which it bounced off of today. That would be support around 7,692-7,693 for tomorrow. If it breaks through this time, then the last support that would potentially come into play would be at 7,650-7,655 from its next downtrend (green).
The Russell 2000 once again remained in its big primary downtrend on the daily which is still the only valid daily range that is left. It continues to get closer to the top of the range which will be resistance at 2,815-2,817 for tomorrow. That is only about 1.25% away now so it could be tested soon - potentially tomorrow. On a pullback, the only support to watch is also from this range (the bottom end of it) at about 2,635. However that is over 5% away so it's extremely unlikely that it's tested even if we did get a big sell-off. Instead, on a pullback it will just continue to trade in this range for now.
