Over the weekend tensions flared between the U.S. and Iran again with more attacks between the two countries and today President Trump said they are reinstating the Iranian blockade. Oil spiked on the news and finished the session up over 9% on the day which is sparking inflation fears again. Chip stocks were also weak with Korea's KOSPI index plunging again and bleeding into U.S. markets. Semiconductors were weak with SMH closing down over 4% while the SOXX finished down nearly 5%. This led to tech underperformance as the Nasdaq closed down 1.55% while the Nasdaq-100 (NDX) lost nearly 2%. Meanwhile the S&P 500 and Russell 2000 both fell about 0.80%. With the market sell-off today, the VIX closed up over 14% and finished near the highs of day. Tomorrow morning we will be getting CPI (consumer price index) - the next batch of inflation data along with big bank earnings.
The Nasdaq continues to trade within its large primary daily range (white) so it doesn't start any new trends again. This will be the only range again to watch until it breaks through it to start a new one. Resistance from it will be at about 26,600-26,625 while support will be at 24,900-24,925.
The S&P similarly remains within its big primary uptrend (white) so it doesn't start any new ranges either. Resistance from this range will be at about 7,648 tomorrow and it's the only daily resistance level to watch for now. The first support to watch on a continuation of the sell-off will be at about 7,350 from its prior downtrend (yellow). After that, the last support to watch would be from its primary uptrend (white - bottom of the range) at about 7,335.
The Russell 2000 started a new downtrend on Friday which it also traded within today, so it doesn't start any new ranges for tomorrow either. It did get down near its first weekly support today around 2,945 and held it, though it wasn't a significant bounce into the close and was still a pretty weak finish. Tomorrow's CPI print will likely make or break it.
For the daily setup though, if there is a rally tomorrow on the CPI print, the first resistance to watch will be from its primary downtrend (white) at 2,985. After that its prior uptrend (purple) will be the last daily resistance at 2,992-2,993.
On a continuation of the pullback, the first support will be from its prior downtrend (yellow) at 2,943. If that doesn't hold, the next support will be from its next downtrend (purple - bottom of the range) at 2,923. The last support to watch will be from its primary downtrend (white - bottom of the range) at about 2,902. It would have more daily support from the bottom of its prior range again (yellow) around 2,867 but this level is nearly 3% away so even with a sell-off it may not get tested tomorrow.
