Over the weekend there were reports that the U.S. and Iran were close to a deal for a 60 day ceasefire extension which sent oil and treasury yields lower and stock futures higher as it eased inflation fears. There were also reports earlier today that ships were traveling through the Strait of Hormuz. Markets rallied on the news with the rate sensitive Russell 2000 leading the way as it gained 1.79% and reached new all time highs. The Nasdaq and S&P also hit new all time highs, posting gains of 1.19% and 0.61%, respectively. Despite the rally though, the VIX closed up 2.5% and finished at $17.01 and was showing relative strength all day. Oil finished down over 3%, but finished near the highs of the day.
In the last update, I mentioned that the first resistance level to watch for the Nasdaq would be at about 26,650 from its primary range. It broke above this and closed just a hair above it at 26,656. Even though it closed above it, it was not strong finish, but it still starts a new uptrend. It also got rejected near its prior uptrends so those previous trends all remain valid for now.
The first level to watch on the Nasdaq tomorrow will again be at about 26,650 from its prior sideways range (blue) that it closed just above today. If it opens above it, then that level will act as support. But if there's a slight gap down below it, then it becomes resistance and the only daily support likely to be in play on a pullback will be from its new primary uptrend (white) that it started today which will be at about 26,550 tomorrow.
If the Nasdaq does open above the 26,650 level tomorrow, or if it opens below and breaks through it, then he next resistance to watch will be from its prior uptrend (purple) at about 26,850 on a continuation of he rally. After that, the last resistance in play will be from its next uptrend (yellow) at about 26,900.
The S&P didn't break through its primary uptrend today so it doesn't start any new trends for tomorrow. The first resistance to watch tomorrow will be at about 7,538 from its prior uptrend (orange). After that there will be more resistances at 7,558 (purple), 7,569 (yellow) and finally its primary uptrend (white) would be the last resistance at 7,588.
Its primary uptrend (white) will also be the first support level to watch at 7,511-7,512. The S&P closed at 7,519 today, just above it. If it were to gap below this 7,511-7,512 level tomorrow then it would also become resistance, and the last support to watch on a pullback would be from its prior uptrend (orange) at 7,450-7,455.
The Russell 2000 broke and closed above its prior primary uptrend resistance today, starting a new uptrend. However, this has been a sharp rally for it over the last few sessions and it needs to continue to gap up in order to open above its new primary uptrend (white) tomorrow which will be at about 2,926. Given that the Russell closed at 2,920 today, odds are it opens below it in which case that 2,926 level becomes resistance on a rally attempt.
If it does get that gap up above 2,926, or breaks through it on a rally attempt, then the next resistance level will be at 2,950 from its prior uptrend (yellow) which it closed above today. After that, its primary uptrend (white - top of the range) would be the last resistance level at about 2,988.
If it fails to gap above 2,926, or breaks through it after an open above it, then the next support to watch on a pullback will be at about 2,887-2,888 from its prior uptrend (yellow - bottom of the range). For now that's the only support likely in play on a pullback and it would start a new trend going into Thursday, but we would first need to see how it finishes tomorrow to determine the direction of it.
