Nvidia reported earnings last night and the stock jumped nearly 9% and hit its highest levels in nearly 3 months. While this was a big boost for the Nasdaq today, a lot of other semiconductor stocks didn't participate in the rally as the SOXX only gained 2% with many large semi names closing lower (AMD, MU, SNDK, etc). But the Nasdaq was the leader today, closing up 1.57% near the highs of day while the S&P added 0.72%. There was a rotation out of small caps and into tech as the Russell 2000 lagged, but still posted a gain of 0.28%. With the rally today, the VIX fell another 4.6% to settle at $14.51 which is again approaching the lows of year. Tomorrow we will get what is arguably the biggest event of the week with Fed chair Kevin Warsh at Jackson Hole which comes just a couple of days after Wednesday's PCE data which was slightly hotter than expected.
With the big gap up and rally in the Nasdaq today it closed well above its prior downtrends to start a new primary uptrend here. It is already at the top this new primary uptrend (white) so there is room to pullback here. The only daily resistance to watch tomorrow will be from this new primary uptrend at 26,600-26,625.
On a pullback, the first support to watch will be from its prior uptrend (purple) at about 26,450. If that doesn't hold, its next support will be from its primary uptrend (white - bottom of the range) at about 26,135 with more support just under that from its prior downtrend (orange) at about 26,115. If neither of those hold, the last daily support that would potentially come into play on a larger sell-off would be from its next downtrend (blue) at 26,050-26,060.
The S&P also got a gap up this morning but it got rejected right at its primary sideways range that it started a couple of days ago. This was the first big resistance at 7,740-7,742 I said to watch out for in yesterday's update on a gap up. It got rejected there with a high of 7,741.27. It didn't break through that primary trend, so it doesn't start any new trends for tomorrow.
Its primary range (white) will again be the first big resistance to watch on another rally attempt tomorrow. Since it's a sideways range, that resistance level will be the same at 7,740-7,742. If it breaks through it, the last resistance will be just a hair above that at 7,743 from its prior downtrend (yellow). So this 7,740-7,745 area will be big resistance where both of these trends meet. There is potential for a gap above this area however, if that happens then the 7,740-7,745 level would become support on a pullback.
If we get a pullback tomorrow with Kevin Warsh at Jackson Hole being the big catalyst, then the first support to watch will be from its prior downtrend (yellow) at about 7,690. If that doesn't hold and we get a bigger sell-off, the last daily support likely to come into play would be its primary range again (white - bottom of the range) at 7,635-7,637.
The Russell 2000 continues to trade along the lower end of its primary uptrend and it didn't break again, so once again it doesn't start any new trends for tomorrow. Its prior uptrend (orange) will still be the only resistance to watch on a rally which will be at about 3,045 tomorrow.
On a pullback, its primary uptrend (white) will also be the first support to watch again at about 2,992. If that doesn't hold, its next daily support would be from its prior downtrend (blue) at 2,974-2,975 while its primary weekly uptrend (see the weekly update) remains around 2,955.
