President Trump and President Xi held their first round of talks in Beijing today which they said was extremely positive and constructive. Though, no major headlines during the summit came out in regards to any agreements, the markets continued their rally to fresh all time highs. Tech led the way once again as the Nasdaq finished higher by 0.88%. The S&P added 0.77%, breaking and closing above 7,500 for the first time. Small caps also participated today with the Russell 2000 closing higher by 0.67%. The VIX which has remained elevated through this rally finished lower by 3.4% to close at $17.26.
The Nasdaq did break above yesterday's primary uptrend, but it failed to close above it today. This technically is a failed breakout, but it was still a strong finish and starts a new uptrend. Its new primary uptrend will however be an added level of resistance. The first resistance to watch tomorrow will be on a retest of this failed breakout (yellow) at about 26,800 with its new primary uptrend being resistance just above that at about 26,825. If it breaks through that, its last daily resistance will be from its prior uptrend (purple) at about 26,870.
On a pullback, its first support will be from the new primary uptrend (white) at about 26,090 while the last daily support will be from today's failed breakout (yellow - bottom of the range) at about 26,070. So there is room to pullback here with today's failed breakout, but it's still in an uptrend.
The S&P had a similar failed breakout today in which it broke just above yesterday's primary uptrend but failed to close above it. Even though it wasn't a particularly weak finish, this failed breakout does give it an added level of resistance. However, it also started a new uptrend with the higher high it put in today.
The first resistance to watch tomorrow will be at 7,535-7,537 on a retest of today's failed breakout (yellow). Its new primary uptrend (white) will be resistance just above that at 7,540-7,542 which will also be its last daily resistance. Meanwhile, if we get the pullback tomorrow then the first support will be at its new primary uptrend (white) at 7,410-7,415. If this doesn't hold its last two supports will be from its prior uptrends at 7,400 (purple) and 7,390 (yellow).
The Russell 2000 once again remained in its primary sideways range today so it doesn't start any new ranges for tomorrow. The first resistance to watch will be from this primary range (white) at 2,887-2,888. If it breaks through that, its prior uptrend (orange) would be next at about 2,900. On a pullback, the only support to watch will be from its primary range again (white) at 2,799-2,800 which is also that weekly support that I've talked about in previous updates.
