After yesterday's hot CPI report, we got another read on inflation this morning with the PPI print which also came in hot at +1.4% vs the estimate of +0.5%. Wholesale inflation increased 6% annually vs the 4.9% estimate which was the largest increase since December 2022. Markets were a bit lower after the hot PPI report in the morning, but they quickly shrugged it off and resumed the rally which was led by tech as the Nasdaq gained another 1.2% and reached new all time highs. The S&P also hit new all time highs and closed higher by 0.58%. The Russell 2000, which is the most rate sensitive index, was the laggard today and it finished flat with a gain of 0.04%. The VIX was also relatively flat but did close lower at $17.87 for a loss of 0.67%.
Tomorrow morning we will get jobless claims and retail sales data, but more importantly the two day meeting between President Trump and President Xi of China will begin. We will likely get a lot of market moving headlines as they discuss tariffs and semiconductor restrictions among other things.
Today the Nasdaq made a rally attempt at its first uptrend resistance around 26,500 from its prior uptrend (yellow) that I mentioned in last night's update. It didn't break through it as it put in a high of 26,474.18, and it also didn't break through its primary uptrend so it doesn't start any new trends for tomorrow. The next resistance level to watch on the Nasdaq will be at 26,690-26,700 from both its primary uptrend (white) and its prior uptrend (yellow) where they intersect. If it can break through this area, the last resistance for tomorrow that would likely be in play will be from its next uptrend (purple) at about 26,875.
If we get a pullback, right now there is only one level of support from its primary uptrend (white). That will be support at about 25,960 tomorrow. If it breaks, we'll have to wait and see how it finishes for the next trend to develop.
The S&P didn't break through any trends today either so it also doesn't start any new trends for tomorrow. It held its prior uptrend (yellow) on the tiny pullback in the morning and that will be the first support to watch again tomorrow at about 7,383. If it doesn't hold, its primary uptrend (white) will be the next support at about 7,367. Meanwhile if the rally continues, the only resistance to watch will be from its primary uptrend (white) at 7,510-7,515.
The Russell 2000, which was flat today, also remained within its new primary sideways range. So similar to the S&P and Nasdaq, it doesn't start any new ranges for tomorrow. The first resistance to watch on a rally attempt will be from its primary range (white) at 2,887-2,888 and then its prior uptrend (orange) will be resistance just above that at 2,890. These will likely be the only two resistance levels in play for tomorrow. On a pullback, its primary sideways range (white) will be the only support in play and that will be at 2,799-2,800 which is also where its primary weekly uptrend support remains.
