This morning the markets opened up higher and the bulls looked to be in full control again, but in the middle of the day there were some headlines out from President Trump that took specific sectors lower and seemed to scare the markets a bit. First he said that the U.S. would be banning large institutional investors and companies from buying homes. This sent housing stocks (XHB, DHI, LEN, KBH, etc.) and investment firms (BX, AMH, etc.) lower. He also said that he will not permit dividends and stock buybacks for defense companies which took defense stocks lower (RTX, LMT, GD, etc.). However, defense stocks rallied back sharply after hours as President Trump proposed raising the U.S. military budget to $1.5T. But the earlier comments threw a bit of a wet blanket on the morning rally. The VIX has also started to show more strength recently as it is now back over $15 and closed up 4.27% today.

In yesterday's update I mentioned that IWM put in a failed breakdown on the daily, but that it would likely open below its prior uptrend which would now act as resistance. It did see a higher open, but not enough to open above its prior uptrend support. This led to a pullback in IWM early in the day, however it found support near the new uptrend support that it started from yesterday's failed breakdown and it managed to recover in the afternoon even with the rest of the markets selling off. Since it didn't break through either the prior uptrend resistance or the new uptrend support levels, the same trends from yesterday remain intact and no new trends will be started. Support for tomorrow from its new (primary) uptrend that was started yesterday will be at about $255.50 which is right where it closed at today ($255.48). So there is risk of breaking through this level tomorrow if there's no gap up. If it does open above the $255.50 level then that area will be support and vice versa if it opens below it.

QQQ was the only one that finished positive today - just barely by 0.10%. But, it closed well off its highs and was a pretty weak finish despite the higher close. This morning it did open above its primary uptrend support just below $623 (see yesterday's update) but it did break just below it before the early morning rally. It still closed above it, which starts a new uptrend on the daily. However, because of the weak finish it will almost certainly open below its 2 current uptrends tomorrow (blue and white channels). It also broke above its prior uptrend resistance this morning (purple channel from yesterday's update) which means that one is no longer valid. So going into tomorrow, the $626.75-$627 area is going to be resistance from its current uptrends (blue and white) - this is assuming there's no gap above those levels. And if we do get a pullback, the $620.75 area will be the first support to watch (purple channel) followed by $620.25 (yellow) from its prior downtrend.

SPY finished near the lows of day and was actually the weakest today, closing down 0.32%. From a technical perspective nothing changes again as it remains in its two large daily uptrends. But, there is potential bearish divergence on the daily now with today's pullback and we would need to see some continuation tomorrow for it to confirm. The first daily support to watch if we do get that pullback will be at about $684.50 tomorrow (purple channel) from the retest of the failed breakdown last week. After that, the new uptrend support is at about $683.30. If it were to test the $683.30 area it would be a warning sign of a potentially larger breakdown, but we'd still need to see confirmation.