The markets gapped up this morning to start the week and tech was strong with the Nasdaq up over 1% at the highs this morning. However, those gains faded throughout the day and the selling pressure accelerated into the close and markets finished lower for the day. The Nasdaq finished down 0.05%, essentially flat at the close, while the S&P closed down 0.19% which was also at the lows of day. Small caps were the big laggard today on the back of rising yields and oil prices. The Russell 2000 closed down 0.67% - also at the lows of the day. The 10 year yield briefly jumped above 4.6% as oil topped $84/barrel. This puts pressure more on small caps as rising inflation due to surging oil prices increases odds of rate hikes. Despite today's reversal and lower close, the VIX also closed down by 0.64%. While it did close lower, it was near the highs of the day after clawing back from the morning's gap up in markets.
For tomorrow, the Nasdaq continues to trade within its primary daily downtrend so once again it doesn't start any new daily ranges. Its primary downtrend (white) will continue to act as the only support/resistance until it breaks one way. Support from this range will be at 24,850-24,875 tomorrow while resistance will be around 26,575. However it will also have weekly support at 25,075-25,100 before its first daily support (see the weekly update).
The S&P similarly continues to trade within its primary daily range and won't start any new daily trends again. Its first daily support from its primary uptrend (white) will be at 7,350-7,355 tomorrow. If that doesn't hold, the last daily support likely to come into play would be from its prior downtrend (yellow) at about 7,290. But there will also be weekly support before that at 7,315-7,320 (see the weekly update). The only daily resistance to watch for now will also be from its primary uptrend (white) at about 7,665.
The Russell 2000 gapped above its prior downtrend this morning but it reversed and closed well below it, giving it a failed breakout on the daily. It did make a slightly lower high, so it does start a new primary downtrend (essentially a sideways range) for tomorrow.
The first support to watch will be from its new primary range (white) at 2,931-2,932. If that doesn't hold, the next support will be from its prior downtrend (orange) that it failed to close above today. That will be support right around 2,900. After that, its next downtrend (yellow) will likely be the last support in play for tomorrow at about 2,895.
On a rally attempt, the first resistance to watch will be from today's failed breakout (orange) at 2,945-2,946. The Russell 2000 closed at 2,942 today so there is potential for a gap above it tomorrow in which case that 2,945-2,946 level would become support. If it does gap or break above it, the next resistance would be from its next downtrend (yellow) at 2,973-2,974 with more just above that at 2,976-2,977 from its new primary range (white). If it can break through this resistance, the last resistance level to watch will be from its prior uptrend (blue) at 2,989-2,990.
