Last week markets continued their historic rally with the Nasdaq jumping another 4.5% which was led my semiconductors and the AI trade. The S&P gained another 2.3%, making it the longest weekly winning streak since 2024. The Russell was the laggard for the week, but it also gained 1.7%, pushing it to a sixth straight weekly gain. Despite the strong rally, the VIX closed higher for the week by 1.2%.
Aside from the Iran and U.S. talks and oil prices, there are other big catalysts to watch for this week. Inflation will be the big data points to watch with CPI on Tuesday morning with core and headline numbers and how the surge in oil prices will effect it. Wednesday morning we will get more inflation data with PPI on the producer side of things. Lastly, on Thursday and Friday, the Trump-Xi summit will kick off. This is will likely move markets as ongoing tariff talks continue between the U.S. and China as well as semiconductor export restrictions.
Looking at the technical side now, the Nasdaq broke and closed above its prior weekly uptrend resistance which starts a new weekly uptrend for it. The first resistance to watch will be from its new primary uptrend (white) at 27,350-27,375 which is over 4% away. If it can break through this, the last resistance likely to be in play will be from its prior uptrend (purple) at about 27,550.
If there's a pullback, the first support to watch will be from its prior uptrend (yellow) at about 25,925-25,950 which is only about 1% away. If that breaks, its primary uptrend (white) comes into play from the bottom of the range at 25,625-25,650 which is about 2.3% away. If this doesn't hold either and there's a big sell-off then the last weekly support to watch will be from its yellow uptrend again (bottom end of the range) at 24,200-24,225. This is very far away, almost 8% away, so it's extremely unlikely to actually get there. But there are some big catalysts and after this historic rally nothing would surprise me.
The S&P also started a new weekly uptrend as it broke and closed above its prior uptrend resistance. The first level to watch will be right around 7,400 which is the uptrend from last week that it closed above (orange). The S&P closed at 7,398.93 on Friday, so it does need to at least open slightly higher above 7,400 tomorrow for this level to act as support. If it opens below 7,400, then that area will act as resistance. For bears, ideally a gap down is needed. If it's a flat open then it will likely just break through 7,400 even if it fails to gap above it.
On a continued rally the next resistance to watch will be from its new primary uptrend (white) at 7,660-7,670. This is about 3.5% away and is likely the only resistance to be in play for this week. On a pullback, this same primary uptrend will be the first support to watch at 7,300-7,310 which is only about 1.2% away. If it doesn't hold, its next support will be from the next uptrend (orange - bottom end of the range) at 7,040-7,050 which is almost 5% away in the event that there is a big sell-off.
The Russell 2000 looks a bit different here as it actually had a failed weekly breakout last week. It did make a higher high so it still starts a new uptrend and it wasn't a weak finish, but with the failed breakout there is an added level of resistance. The first resistance will be at 2,890-2,895 which will be a retest of last week's failed breakout (blue). If it were to gap above this resistance tomorrow it would be pretty bullish, but it's a little over 1% away. If it does gap above or break through it, then the next resistance will be from its new primary uptrend (white) at 2,920-2,925 which is a little over 2% away. The next resistance level is pretty far around 3,050 from its prior uptrend (yellow) which is nearly 7% away so it's unlikely to test it, but if there was a big rally in small caps that would be the next level to watch.
On a pullback, its first support will be from the new primary uptrend (white) at 2,795-2,800 which is a little over 2% away. If the Russell fails to gap above the first resistance (retest of the failed breakout) tomorrow I would look to enter puts closer to that 2,890 level if there's an early rally attempt at it this week. And if it breaks through its primary uptrend support at 2,795-2,800 then the last support to watch will be from its next uptrend (blue) at 2,720-2,725.
