The 10 year treasury yield rose again today, climbing back over 4.73%. However markets did bounce back and recover some of the week's losses. It was small caps that led today despite the rise in yields. The Russell 2000 gained 0.85% while the Nasdaq and S&P each gained 0.43%. The VIX got crushed again, losing 5.5% to settle at $15.13 as volatility remains historically low.

In yesterday's update I noted that we needed to see a gap up today, particularly for the Nasdaq to get over its primary daily downtrend. Futures did rally overnight and while there was a big fade into the market open this morning, it did manage to gap up above that downtrend and so the 26,065 area I mentioned in yesterday's update became support. It did break through it slightly with a low of 26,049.30, but it did rally back to close above it.

For now the Nasdaq on a daily time frame still starts a new downtrend as it is coming off of these lower lows over the past few sessions. On Monday, the first level to watch will be from its new primary downtrend (white) right around 26,100 which is below today's close of 26,180. Assuming it doesn't gap back under it, that area would act as support on a pullback. From there the first resistance to watch on a rally attempt will be around 26,215 from its prior downtrend (orange). If it were to gap above this area, it would become support as well. Finally the last daily resistance to watch will be from its prior uptrend (blue) at 26,350-26,360.

If the Nasdaq gaps back below its primary downtrend around 26,100 then that level will act as resistance on a rally attempt. If it opens above it, but breaks through it, the next support to watch will be from its next downtrend (orange) around 25,940. After that its next support (green) will be at about 25,875. If this doesn't hold, its new primary downtrend (white) will come into play at 25,625-25,650. The last support to watch if its primary downtrend doesn't hold would be from its prior downtrend again (green - bottom of the range) right around 25,600.

The S&P had a failed breakout today as it broke just above its primary downtrend but failed to close above it. This starts a new primary daily downtrend for it again. For Monday, the first level to watch will be at about 7,768 from the retest of today's failed breakout (green). The S&P closed at 7,674 so it's currently above it and as long as it doesn't gap back down below it, that 7,768 area will act as support. Its new primary downtrend (white) would be the next key level to watch at about 7,673-7,674 which is also just a hair below today's close. The same applies to its primary downtrend, if it opens above it then it will act as support. From there on a rally attempt its prior downtrend (blue) would be the next resistance level to watch at 7,693 followed by its next downtrend (yellow) at about 7,715.

If the S&P does gap below the retest of today's failed breakout (green) around 7,768 then it will act as resistance on a rally attempt with every other level mentioned above being resistance as well. On a continuation of this pullback the next support would then be from its next downtrend (blue) at about 7,627. If that doesn't hold it will have three support levels at 7,592 (white - primary downtrend), 7,588 (green), and 7,586 (purple). So this area between 7,586-7,592 would be big where all three of those supports are.

The Russell 2000 gapped up near its previous uptrend (orange) at the 3,015-3,016 level which it also closed just above at 3,017. It hasn't invalidated this trend yet however, so it will continue to be the first resistance to watch again for on Monday as it will be a bit higher around 3,022. If it were to gap above 3,022, then it would act as support. Its next resistance is much further away around 3,087 from its primary uptrend (white) so it's unlikely that it or any other resistances come into play on Monday.

Assuming the Russell 2000 does not get a gap above the 3,022 level on Monday, that previous uptrend (orange) will continue to act as resistance for now. From there on a pullback, its primary uptrend (white) will be the first support to watch at 2,980. If it doesn't hold, its next support will be from its prior downtrend (blue) at about 2,975.