This week is the final trading week of the year with just 3 trading days left before the New Year's holiday on Thursday. Last week small caps struggled but still logged a 0.25% gain for the week. QQQ closed up of 1.1% while SPY led with a weekly gain of 1.4%. The week mostly played out as expected with light volume and pretty quiet trading around the Christmas holiday.
In last weekends update I noted that there was a little technical damage for IWM with its weekly uptrend support around $251.50, and that it needed to gap above that level to remain in its uptrend. We did get that gap up on Monday above that support, but it still broke down through it during the week. It finished the week at $251.42, right around that key level. This actually finished a few cents above that support so it did technically put in a failed breakdown last week which starts a new uptrend again. However, it was not a strong finish at all and we will almost certainly see an open below this new uptrend support which will be at about $254.25 for this week. So assuming we do not see a significant gap up tomorrow, then the $254.25 area will act as resistance this week if there is a rally attempt towards it. And if it does end up closing below $254.25 this week then it will officially start a new weekly downtrend going into 2026.
For QQQ the failed breakdown did hold from the last update as we got a gap above the $618.25 level and it retested and held its support just below that. So for QQQ the same trends from the prior weekly update remain the same. Now that retest support from the prior week's failed breakdown will now be at about $625.75 which it closed well below on Friday ($623.89). So it is also likely to open below this support, and that level will act as resistance if it does. There would also be resistance around $626.25 from the prior weekly downtrend which is still valid (purple channel). Now the new uptrend support that it started from the prior week's failed breakdown will be just above $610 so that will be the area to watch if we do get a market pullback.
SPY hit new all time highs last week and it finished pretty strong, leading the way for markets, but it did get rejected right around that $691.50 level that I mentioned in last week's update (high of $691.66). So the prior uptrend (purple channel) is still going to be valid resistance for now which will be just below $700 for this week. Meanwhile if we do get a pullback going, then the current (primary) weekly uptrend support will be around $679.25 for this week.
