The markets didn't get any follow through to last week's breakout attempt with the Nasdaq leading the way lower as the semi/AI trade unwound. For the week the Nasdaq lost 2.9% while the S&P fell 1.6%. Small caps, which have outperformed this year, continued to see relative strength this week. However, the Russell 2000 still posted a weekly loss of 0.5%. After hitting its lowest levels since early January and briefly dipping below $15, the VIX jumped back up to close at $18.77 which was a weekly gain of about 25%.
Last week the big banks began to report earnings to kick off earnings season. Next week it continues with big tech beginning to report including Alphabet (GOOG/GOOGL) and Tesla (TSLA) on Wednesday after the close. Intel (INTC) will also be a big name to watch on Thursday as it will effect the rest of the semi space which has been struggling as of late. Finally, American Express (AXP) will report on Friday morning which will give us a look at the state of consumer spending.
Looking at the technicals, the Nasdaq broke and closed above its prior weekly downtrend last week but didn't see any continuation of it this week. Instead it pulled back near its primary weekly uptrend support (white) which did hold, so it doesn't start any new weekly trends for next week. That primary uptrend will be the first level of support to watch next week at 25,075-25,100. If it doesn't hold, the next support to watch will be from the bottom of its prior downtrend (blue) around 23,775. This will also be the only range to watch on another rally attempt with resistance from it being around 25,775.
The S&P also remains in the middle of its primary weekly uptrend (white) so it doesn't start any new weekly ranges here either. This will be the only range to watch for now until it breaks one way. Support from it will be at about 7,315 while resistance will be around 7,710.
The Russell 2000 had a small pullback this week near its primary weekly uptrend, but it didn't break through it, so it doesn't start any new trends. It did break through its prior (secondary) uptrends, but didn't invalidate any of them so those remain intact as well.
For next week, the first two trends to watch will be its prior uptrends (yellow and blue) at 2,968-2,970. The Russell closed at 2,962 this week, so it needs to gap up on Monday back above 2,970 for those prior trends to act as support. If it does get that gap up, then resistances to watch will be at 3,135-3,140 from its primary uptrend (white) and prior uptrend (yellow). Its last two resistances from its next uptrends (purple and blue) would be around 3,150 and 3,160.
If it fails to get the gap above 2,968-2,970 on Monday then those two prior uptrends (yellow and blue) will act as resistance there. On a pullback, its only weekly support in play for now will be its primary uptrend (white) around 2,940. If it breaks down through this level then it will start a new trend going into the end of the month, but we'll first need to see how it closes the week to determine the direction of that new trend.
