After yesterday's small pullback, the markets resumed their rally with small caps leading the way this time as the Russell 2000 closed up 1.75% at the highs of day. Tech remained strong as well with the Nasdaq gaining 1.03% while the S&P added another 0.81% as all three indexes reached fresh all time highs. The VIX gave back most of yesterday's gains as it closed down about 5% today to finish at $17.38.
This morning the Nasdaq did get that big gap up above 25,210 to open above its primary uptrend support. It also held it on the quick pullback after the open as it put in a low of 25,217.16. Since it didn't break through it, it doesn't start any new ranges for tomorrow. That primary uptrend (white) will be the first level to watch again tomorrow which will be at about 25,500. This is about 0.7% away from today's close of 25,326, so it will need to get that big gap up again above 25,500 for it to act as support. If not, it will act as resistance on a rally attempt.
On a pullback, the first support to watch will be at 24,985 from its prior sideways range (orange) with more support from its next range (yellow) just under that at 24,960. If neither of those hold, its next uptrend (purple) would be support at 24,865. Its prior downtrend (blue) would be the last likely support for tomorrow at 24,775 if there's a larger pullback.
The S&P didn't break through its primary uptrend today either, so it doesn't start any trends for tomorrow. It did get the rally up to about 7,275 which was the first resistance from its prior uptrend (yellow) I said to watch out for in yesterday's update. It didn't break it as it hit a high of 7,273.26 before a little pullback into the close.
For tomorrow, that same uptrend (yellow) will again be the first resistance to watch and that level will be at 7,290-7,295. If it breaks through it, the last daily resistance will be from its primary uptrend (white) at about 7,335. Meanwhile if there's a pullback, its primary uptrend will be the first support to watch at about 7,210 and if that doesn't hold its next uptrend (yellow again) will be support at 7,185.
The Russell gapped just above its primary uptrend support of 2,800 this morning as it opened at 2,805.99 and that was the low of the day for it as it rallied right from the open and didn't look back. Since it didn't break through that 2,800 support, it won't start any new trends for tomorrow - similar to the S&P and Nasdaq.
Its primary uptrend (white) will again be the first support to watch tomorrow and that will now be at about 2,820. It closed at 2,845 today so it's well above it and will act as support on a pullback. If that doesn't hold, its next support would be at 2,750-2,755 from its prior downtrend (purple) if there's a larger sell-off. And if the rally continues, its primary uptrend (white) is the only resistance overhead at 2,900-2,905.
