Futures were lower last night and markets gapped down to start the session after Iran closed the Strait of Hormuz again due to peace talks falling apart. Oil jumped 4% on these reports but finished near the lows of the day and markets also rallied back and mostly shrugged the news off. The rally back was led by small caps as the Russell 2000 closed up 0.58% to new all time highs while the Nasdaq and S&P both closed down about 0.25%. Despite the declines, they also finished near the highs of day. The VIX also closed up about 8% at $18.87 with today's market pullback which is a lot considering the markets weren't down much. But it was also near the lows of the day as it was up as much as 14% near $20 at its highs.
The Nasdaq did break below its primary daily uptrend support today but rallied back to close above it which gives it a failed breakdown and starts a new uptrend. The problem is that it has to keep gapping up to continue to hold these new uptrends as the market rally has been parabolic. For tomorrow, its new primary uptrend (white) will be at about 24,515. The Nasdaq finished at 24,404 today, so it would need to gap up about 0.5% to open above this support. It's not impossible, but odds are it does open below it in which case the 24,515 level becomes resistance. From there, the next support to watch on a pullback is very far around 23,700-23,725 from its prior uptrend (blue). It's unlikely to test this level without some major catalyst, so if it does close below its current primary uptrend support then it will simply start a new primary trend, meaning it doesn't actually have to get down to that 23,700-23,725 level even if we were to get a sell-off tomorrow.
In the event that the Nasdaq does get that 0.5% gap up to open above its primary uptrend support, or if it simply rallies to break above it, then the next resistance level to watch would be from today's failed breakdown (orange) at 24,575. If it can also break through that level then the next uptrend (blue) would be resistance at 24,700-24,725. There are more resistances above this, but they are unlikely to be in play tomorrow.
Unlike the Nasdaq, the S&P broke and closed below its last primary uptrend support from Friday, however it still starts a new uptrend as it has continued to make higher highs over the past week. For tomorrow its new primary uptrend (white) will be at about 7,145 which it will need to gap above in order for this level to act as support. The S&P closed at 7,109 today so it would also need about a 0.5% gap up in the morning to achieve this - similar to the Nasdaq. If it fails to get that gap up then the 7,145 level would be resistance on a rally attempt. From there, the next support to watch on a pullback will be at about 7,070 from its prior uptrend (blue) and then the 6,995-7,000 level will be support from both its purple and yellow uptrends if we get a larger pullback.
If the S&P can get that 0.5% gap up above its primary uptrend around 7,145 tomorrow then that level will act as support. Then the next resistance levels to watch will be at 7,210-7,215 from its prior uptrends (yellow and blue) as well as 7,220 from its next uptrend (orange). So there will be several resistances around 7,210-7,220. If it can break through those then its primary uptrend (white) would be next at 7,265 but this level is pretty far for tomorrow and unlikely to be tested.
The Russell remained well within its primary uptrend again today so it doesn't start any ranges going into tomorrow. For now the only real range that is in play is this primary uptrend (white) and the levels to watch from that will be at 2,845-2,850 on a continued rally and 2,750 if we were to get a pullback. If there is a big sell off and it breaks through the 2,750 support then it's possible it could go for its next support (purple) at 2,715 but it's unlikely without some big catalyst.
