After finishing near the lows last week, the markets got a bounce to start this week off with a positive note and it was led by tech as Nvidia's GTC conference kicked off. The Nasdaq closed up 1.22% while the S&P finished up 1.01% and the Russell 2000 gained 0.94%. While these were solid gains for the day, it wasn't a strong finish as the Nasdaq and Russell 2000 finished close to the lows of the day. Meanwhile the VIX got crushed as it closed down 13.5% with the market bounce. I mentioned in the last update that the VIX was flat on Friday despite the market weakness which was odd. Oil also pulled back to close lower by 4.5% at $94.22 after it opened above $100 Sunday night.
The Nasdaq did not break through any of its daily trends from the previous update, so it doesn't start any new trends going into tomorrow's session. If we get another sell-off the next support to watch will be 22,120-22,125 from the retest of Friday's failed breakdown (blue) followed by its primary support (white) at 22,075. If that does not hold, then its prior downtrends (purple and yellow) will be supports at 21,965-21,975. On another rally attempt these same two prior downtrends (purple and yellow) will be the first resistances to watch at 22,750-22,760. If it can clear through these levels then its primary trend (white) will be the next resistance to watch at 22,915 followed by its prior uptrend (blue) at about 22,955.
The S&P had a failed breakout above its prior daily downtrend which starts a new downtrend for it going into tomorrow. The first key level to watch for tomorrow will be at 6,675 which is the retest of today's failed breakout (yellow). Since the S&P closed at 6,699 today, odds are in favor of it opening above this 6,675 level tomorrow in which case it would be support. The next resistance would then be from its new, primary downtrend (white), which will be at 6,702-6,703. It could potentially gap over this as well since it closed just below it and that would be bullish as both of those levels would then be supports on a pullback. From there, the last resistance would be from its prior downtrend (purple) at about 6,745.
If we do have the gap down scenario below the 6,675 level, then that will be resistance on a retest from today's failed breakout. From there the next support would be just above 6,600 from its prior downtrend (purple) and its new downtrend (white) would be support at about 6,570.
The Russell 2000 gapped and closed above its prior downtrend, however it finished near the lows and it still starts a new downtrend going into tomorrow. Its new, primary downtrend (white) will be resistance at 2,513-2,514 tomorrow. The Russell closed at 2,503 today so odds are it opens below it tomorrow but we could see a gap over it as it's only about 0.4% away. If it does get that gap up above it tomorrow, the 2,513-2,514 level would act as support on a pullback and retest. There are no other trends above it for now so if it gaps or breaks above it then we'll need to wait and see how it finishes for its next trend.
On the other hand if it does open below this 2,513-2,514 level tomorrow, then it will act as resistance on a rally attempt. The first support to watch on a pullback would be from its prior downtrend (yellow) at about 2,483. If it breaks through this support, then its primary downtrend (white) comes into play again from the bottom of the range which will be at about 2,450. Its prior downtrend (yellow) would then be the next level again to watch from the bottom of that range which will be at 2,427 followed by its next downtrend (purple) at about 2,418 in the event we get a big sell-off again.
