We got our first big earnings report of the earnings season with JPM reporting this morning as they posted strong results and beat on the top and bottom lines. Despite that, the stock sold off over 4% and dragged the rest of the financial sector lower as XLF closed down nearly 2% for the day. The markets also reversed their early gains after futures rallied on a cooler than expected CPI report. IWM held up the best on the day, closing down just 0.06% while QQQ and SPY posted losses of 0.15% and 0.2%, respectively. Tomorrow we may potentially get a vote on the legality of the Trump tariffs by the Supreme Court after it was delayed last week. The VIX has been grinding higher since it reached its lowest levels since 2024 just a couple of weeks ago. It's now up nearly 7% for January and settled at $15.98 today.
Looking at the daily setups now, the markets did get a last minute rally back into the close to finish off their lows. Still, IWM had a pretty weak finish despite essentially finishing flat on the day. It didn't break through any of its support or resistance levels on the daily that I mentioned in yesterday's update, so no new trends will be started. The first support level to watch for tomorrow will be at about $261.50 from its primary (white channel) uptrend. Since IWM closed at $261.35 today, it needs to gap up a bit tomorrow to hold this support. If it opens below $261.50 then that area becomes resistance. After that, the next support level to watch will be at about $260 from its prior (purple) uptrend support. Meanwhile the next resistance to watch, if we do resume the rally, will be at about $264.75 which is also resistance from its prior uptrend.
Not much changes for QQQ as it remains in a single uptrend and didn't break above or below it, so that same trend remains in play. Support from this uptrend will now be at about $622.90 for tomorrow while resistance will be at about $634.25.
SPY also did not break through any support or resistance levels on the daily and so nothing changes for it today either. It remains in the same 2 uptrends that it has been grinding higher in for weeks. The first support from the retest of last week's failed breakdown will now be at about $688.25 tomorrow while the new uptrend will provide support at about $686.75.
