This morning's inflation report came in a little better than expected with month-over-month core PCE up 0.2% vs the estimate of +0.3% while year-over-year core was up 3.3% which was in line with expectations. This helped markets rally this morning and in the afternoon there was a report out of Axios that the U.S. and Iran had reached a deal, but that it still needed President Trump's final approval. This report sent oil lower which also helped rally stocks further. Tech led in today's rally with the Nasdaq closing up 0.91% to new all time highs. The S&P and Russell 2000 also added about 0.57% each, hitting new all time highs as well. With the continuation of the rally, the VIX fell another 3.4% to close at $15.74.
The Nasdaq didn't get the gap up to open above yesterday's primary uptrend support, but it did break through it and close above it to give it a failed breakdown which starts another uptrend for it. Its new primary uptrend (white) will be the first resistance level to watch tomorrow at about 26,985. If it breaks through that, then its next resistance will be from its prior uptrend (purple) at 27,070 and the last resistance likely to be in play tomorrow will be at about 27,130 from its next uptrend (yellow) if there's another big rally.
On a pullback, the first support to watch will be from its prior uptrend (orange) at 26,890 with its next uptrend (teal) being support just below that at 26,875. If neither of those hold, its primary uptrend (white) will be the next support from the bottom of the range at 26,640 and finally its prior downtrend (blue) would be the last daily support to watch at about 26,630.
The S&P similarly put in a failed breakdown which gives it another uptrend going into tomorrow. The first resistance to watch for it will be from today's failed breakdown (green) at 7,574. It finished at 7,563 today so it would need to gap up above 7,754 tomorrow to open above this retest, otherwise it will act as resistance. After that, its new primary uptrend will be resistance at about 7,577. If it breaks through this, then its next resistances will be at 7,585 (orange), 7,591 (teal), 7,605 (purple), and 7,618 (yellow). All of these prior uptrends remain valid so there will be several resistance levels to deal with.
On a pullback, its first support will be from the new primary uptrend (white) that it started today which will be at about 7,516 tomorrow. If that doesn't hold, its last daily support likely to be in play tomorrow will be from its prior uptrend (orange) right at 7,500.
The Russell 2000 also put in a failed breakdown today, starting a new uptrend. It did get rejected at tis first weekly resistance at about 2,943 today, but it was still a pretty strong finish for the day. For tomorrow, the first resistance to watch will be from its prior uptrend (purple) at 2,953. After that, the retest of today's failed breakdown (yellow) will be resistance at 2,966. If it can break through these, then its new primary uptrend (white) will be resistance at about 3,008. But before that it will also have weekly resistance just below 3,000.
On a pullback, the only support to watch will be from its new primary uptrend (white) at about 2,927. There is potential for a gap below it as it closed at 2,936 today and it's only 0.3% away. If it were to gap below 2,927 then that level would also become resistance on a rally attempt. And if it does gap or break below it, then it will start a new trend but we'll have to wait and see how it finishes to determine the direction of it.
