Small caps were the big laggard today with the Russell 2000 closing down 0.92%. This was in large part due to oil rising again as well as treasury yields. Oil gained another 2.5% today after Marco Rubio said that Iran was not serious about talks. Yields also climbed as inflation fears continue to rise with the price of oil. The 10 year treasury yield jumped to 4.65% and is almost back to the May highs. The Nasdaq and S&P were outperforming early on but everything rolled over into the close and the Nasdaq and S&P posted losses of 0.57% and 0.14%, respectively. However despite the lower close for markets, the VIX also closed lower by 2.4% at $16.64 which was at the low of day.
After the close, Alphabet (GOOG/GOOGL) and Tesla (TSLA) both reported earnings. Alphabet's report was very strong, beating on both the top and bottom line. The big thing everyone was watching was their capex guide which was also higher than expected. The capex guide is helping semiconductors after hours, but Alphabet is selling off with the stock down about 4% right now. Tesla reported a beat on top line (revenues) but missed pretty much everything else and the stock is currently down about 3% on the report.
For the Nasdaq tomorrow, nothing changes again as it continues to chop around in the middle of its primary daily downtrend. Until it breaks one way, it won't start any new trends. Support from this range will be at about 24,850 while resistance will be at about 26,550.
The S&P remains the same as well as it also continues to chop around in the middle of its big primary daily uptrend (white). This will likely be the only range that potentially comes into play tomorrow with support being at about 7,360 and resistance at about 7,675.
The Russell 2000 sold off today and broke just below its primary uptrend from yesterday. It did manage to climb back a bit into the close and close back over it, putting in a failed breakdown on the daily. However, it was not a strong finish and it will need to gap up a bit tomorrow to open back above these uptrends.
The first level to watch will be its new primary uptrend (white) which will be at about 2,962. The next key level will be the retest of today's failed breakdown (green) at about 2,965. The Russell closed at 2,959.93 today so it if it can get a little bit of a gap up above those two levels then they will act as support. After that, the next resistance on a rally attempt would be from its prior downtrend (orange) at 2,974-2,975. If it can break through this level, the next resistance area would be from its new primary uptrend (white - top of the range) right around 3,000. The last two resistance levels would be at about 3,005 (yellow) and 3,010 (green - top of the range).
Now if the Russell fails to get the higher open above its first two uptrends at 2,962 and 2,965 (white and green) then they will act as resistance on a rally attempt. If they do open above them, but break through them, then the next support to watch on a continued pullback will be at 2,929-2,930 from its prior downtrend (orange). If that doesn't hold, the last support that would likely be in play for tomorrow would be around 2,910 from its next downtrend (blue).
