Futures were lower overnight and stocks opened down this morning after Broadcom reported earnings and dragged other semiconductors lower as it closed down 12.6% on the day. But, markets did rally back with a rotation back into small caps as the Russell 2000 closed up 1.45% and hit new all time highs. The S&P also reversed its early losses and finished up 0.41% while the Nasdaq finished slightly lower with a loss of 0.09%, however this was well off of the lows of day. The VIX fell again, closing down 4.11% at $15.40. It continues to inch towards the lows of the year.
Tomorrow morning we will get the biggest data point for the week with the May jobs report out at 8:30 AM ET. Month-over-month nonfarm payrolls are expected to come in at 85,000 vs the prior print of 115,000 while the unemployment rate is expected to remain unchanged at 4.3%.
Looking at the technical setup now, today the Nasdaq did break and close below its last primary uptrend support. Since it also made a lower low, it starts a new primary downtrend heading into tomorrow's session. However, it was a strong finish as the dip was bought and it finished near the highs of day. For tomorrow, the first resistance to watch on a bounce back will be at about 26,965 from its prior uptrend (orange). If it breaks through this, or potentially even gaps above it on the jobs data, then the next resistance will be from its new primary downtrend (white) at about 27,115. If it can break through its primary downtrend then the last resistance in play for tomorrow would be from its next uptrend (blue) at about 27,280.
On a pullback, the only support for tomorrow to watch will be from its new primary downtrend (white) at about 26,535. If it breaks through this level then it will start a new trend heading into Monday's session but we'll first have to wait and see how it closes to determine the direction of that new trend.
The S&P gapped below its last primary uptrend support but rallied back to close above it to put in a failed breakdown. Since it did make a lower low, it still starts a new downtrend. But it was a strong finish and it could gap over its new primary downtrend (white) tomorrow on the jobs data. That new downtrend will be at about 7,577 tomorrow which is below today's close of 7,584. So as long as it doesn't get a gap down below that level tomorrow, the 7,577 area will act as support on a pullback. The next level to watch will be from its prior uptrend (orange) at 7,588 which it could also potentially gap above - in which case it would become support as well. After that, the next resistance will be from its next uptrend (blue) at about 7,645 which would be new all time highs. If it can break above that as well, the last resistances to watch would be at 7,685 (yellow), 7,690 (orange), and 7,700 (blue).
If the S&P fails to open above its primary downtrend at 7,577 tomorrow it will act as resistance on a rally attempt. If it does open above it, but breaks through it, then the only other support to watch tomorrow will be from its primary downtrend (white - bottom of the range) at about 7,495. If it breaks through it, it will start a new trend going into Monday's session but we'll have to wait to see how it closes.
The Russell 2000 broke and closed above its prior primary downtrend. It also made a higher high (new all time high) so it starts a new uptrend going into tomorrow's session. Its new primary uptrend (white) will be the first resistance to watch at about 2,945. If it breaks through that, its prior uptrend (purple) would be resistance at 2,948. And if there's a big rally on the jobs data, then this same trend (purple - top of the range) would be the last resistance to watch right around 3,000.
If we get a pullback on the jobs report, the first support to watch will be from its prior downtrend (yellow) at about 2,910. After that, the next support to watch will be from its new primary uptrend (white - bottom of the range) at about 2,885. If its primary uptrend doesn't hold, then the last support will again be from its prior downtrend (yellow - bottom of the range) at about 2,847.
