After a brief pullback, the markets resumed their rally with the Russell 2000 reaching new all time highs. Even though it did hit new all time highs, tech was the leader with the Nasdaq finishing the week up 2.4% while the Russell finished higher by 1.2%. The S&P was the laggard but still closed up 0.9%. The VIX closed down nearly 5% and is now back in contango. Meanwhile precious metals continued to struggle as the Dollar reached its highest levels in over a year.

Next week the biggest data will come on Thursday morning with PCE (personal consumption expenditures) - another gauge of inflation. Both month-over-month (MoM) and year-over-year (YoY) Core PCE is expected to be in-line with expectations. MoM is expected to increase 0.2% vs the expectations of 0.2% while YoY is expected to increase 3.3% vs the expectation of 3.3%. Headline YoY PCE is expected to increase 3.4%-3.5% vs the estimate of 3.4%. This data, along with future inflation data, will continue to be in focus as Kevin Warsh stated that their goal is to bring inflation back down and was adamant on correcting the mistakes that the Fed had made in previous years.

The Nasdaq gapped and closed above its last primary downtrend from last week's failed breakdown (see last week's update). It pulled back to retest this, held it and closed well above it, which starts a new uptrend for it heading into next week.

The problem now is that it will need to gap up quite a bit on Monday in order to open above its new primary uptrend (white) which will be right around 27,000. That is nearly 2% away from this week's close of 26,517. So it's unlikely that it gets that gap up above it, which means the 27,000 area will instead be resistance on a rally attempt. Now if it can get that gap up above it, or open below it but rally and break through it, then the next resistance to watch will be at its prior uptrend (yellow) at 27,650-27,700. If it can break through this level, the last two resistances potentially in play would be at 27,875 (blue) and 28,050 (purple).

Assuming the Nasdaq does not get that near 2% gap up on Monday to open above its primary uptrend, then the 27,000 area will be the first resistance to watch. On a pullback, its first support will be from its prior uptrend (blue) at 26,200-26,250. If that doesn't hold, the last support likely in play for next week would be from its prior downtrend (orange) at 26,150-26,200.

The S&P did not break through its primary uptrend this week, so it doesn't start any new trends heading into next week. The first resistance to watch on a continuation of the rally will be from its primary uptrend (white) at about 7,660. If it breaks through that, its prior uptrend (purple) would be next at 7,735-7,740 and the last resistance to watch would be from its next uptrend (yellow) at 7,765-7,770.

On a pullback, the first support to watch will be from its prior uptrend (yellow) at 7,460-7,465. This is the retest of last week's failed breakdown again which it bounced around this week. If it doesn't hold, the last weekly support to watch will be from its primary uptrend (white) at 7,260-7,270.

The Russell 2000 didn't break through its primary uptrend this week either, so it also doesn't start any new ranges for next week. It still has several weekly resistances overhead from its prior uptrends. The first two will be from its primary uptrend (white) and prior uptrend (yellow) at 3,040-3,045. After that it will have more resistance at 3,050-3,055 from its next two trends (blue and purple).

On a pullback, its prior uptrend (yellow) will be the first to watch at about 2,870. After that is next uptrend (blue) will be at 2,860 and its last support will be from its primary uptrend (white) at about 2,845.