Wednesday's post FOMC sell-off was reversed yesterday with markets finishing near the highs of day. The rally was led by tech as the Nasdaq gained 1.9% for the day while the Nasdaq 100 jumped 2.5% . Small caps were also very strong as yields pulled back leading to a gain of 2.1% for the Russell 2000. Meanwhile the S&P gained 1.1% for the day. With the rally, the VIX once again sold off to finish down 8.3%. The markets are closed today for the Juneteenth holiday, however futures remain open but it will likely be a very quiet session.
Looking ahead to Monday's setup, not much changed as the indexes all remained within their primary daily uptrends. So none of them will start any new trends here. For the Nasdaq, its primary uptrend (white) will be the only resistance level to watch at 27,100-27,125 on a continuation of the rally. If there's a pullback, this same uptrend will likely be the only support in play as well which will be at 25,750-25,775.
For the S&P, its prior uptrend (blue) will again be the first resistance to watch at 7,560-7,565. If it can break through this, its last resistance will be from its primary uptrend (white) at 7,670-7,675. On a pullback, the first support to watch will also be from its primary uptrend (white) right around 7,400. If that doesn't hold, then its next support will be from the next uptrend (blue) at 7,315-7,320 which will likely be the only other support in play in the event of a sell-off on Monday.
The Russell 2000 got the gap up it needed yesterday to remain in its primary uptrend which never broke so it doesn't start any new trends either. The first resistance to watch on a continuation of the rally on Monday will be from its prior uptrend (yellow) at 3,030-3,035. If it can break through that, the last resistance potentially in play would be at 3,070-3,075 from its primary uptrend (white).
If there is a pullback, the only support that will likely be in play on Monday will be from its primary uptrend (white) at 2,945-2,950. If that doesn't hold it will start a new trend, but we'll have to wait and see how it closes to determine the direction of its new trend.
