Small caps led again today, picking up where they left off on Friday, as IWM closed up 1.59% while QQQ and SPY lagged with gains of 0.79% and 0.67%, respectively. Bitcoin also continued its bounce from last week, jumping nearly 5%. But oil was what everyone was watching after the capture of Nicolás Maduro over the weekend. After initially selling off, oil rallied back to finish up 1.8%. Energy was the big winner today with XLE gaining 2.72% and OIH closing up 5.3% as they are seen as the energy names are seen as big beneficiaries with expectations of Venezuela's oil infrastructure being opened up to U.S. companies.
In last Friday's update I mentioned that IWM could very well likely gap above its daily downtrend resistance around $249 as it finished really strong and needed a very small gap higher to accomplish it. It did gap above $249 and it was pretty much off to the races for it at the open. It didn't retest it, and finished with a gap on the daily. It was also a really strong finish for IWM and it started a new daily uptrend today. However, it needs to gap up again tomorrow to open in this new uptrend as that support for tomorrow will be at about $253.30. With IWM closing at $252.73 today, we do need to see a bit of a gap up. If it fails to gap above the $253.30 area then that area becomes resistance. If it does open below it then we'll have to see how it closes for the start of its new trend, it could potentially still close above it and put in a failed breakdown.
QQQ had a big gap up today and it gapped above the resistance level that I mentioned in Friday's update - $616.75. That was the level to watch on a bounce, but because it opened above it, that level became support. It also held it on the early retest near the open, hitting a low of $616.72. Since it didn't break through that support (yellow channel) it still remains valid and for tomorrow it will be right around $618 which is essentially right where QQQ closed ($617.99). Now this wasn't a strong finish for QQQ, it was a pretty big fade off of the highs of $620.81, but as long as it can hold the $618 level tomorrow it's still fine. If it does open below the $618 level then it will become resistance. If not, it will remain support and the next daily resistance to watch will be at about $621.50 from the primary downtrend (white channel).
Lastly for SPY, it did put in that failed breakdown on the daily last Friday. It wasn't a strong finish on Friday, but it got a big gap up this morning and didn't get close to that retest support which it could still end up testing in coming days as it wasn't a particularly strong finish today (wasn't weak either). But for now, SPY still has the same two uptrends on the daily - both the retest support and the new uptrend that it started on Friday. That retest support for tomorrow will be at about $682.50 if we were to get a significant pullback.
