The market rally resumed today after yesterday's small pullback with tech leading the way as the Nasdaq closed up 1.64% and reached new all time highs again. The S&P and Russell 2000 didn't hit new all time highs, but still posted gains of 1.05% and 0.74%, respectively. Meanwhile the VIX fell another 3% as it closed below $19 again at $18.92.
The Nasdaq managed to gap just above its primary uptrend support of 24,450 this morning which was the key level I noted to watch in yesterday's update. It opened at 24,462, just a hair above it, but it was important as that 24,450 area became support and allowed for the rally to continue. It did break just below it, but closed well above it at the highs of the day which gives it a failed breakdown and starts a new uptrend for tomorrow.
For tomorrow, the first level to watch will be from the retest of today's failed breakdown (teal) at about 24,700. This is above today's closing price of 24,657, so the Nasdaq will have to gap up a bit again in order for this level to act as support. If it fails to do that, it will be resistance on a rally attempt. If it does get this gap up then the next resistance level in play will be at about 25,080 from its prior uptrend (orange) with more resistance at its next uptrend (blue) at about 25,130.
If the Nasdaq fails to gap above the first key level of 24,700 tomorrow, then the first support to watch on a pullback will be from its new primary uptrend (white) at about 24,650. This is just a hair below where it finished today (24,657) and there is risk of opening below this level as well - in which case the 24,650 level would also become resistance. From there on a pullback the next big support to watch will be at about 24,130 from its prior uptrend (blue).
In yesterday's update I noted that the S&P had started a new primary downtrend but that it was already at the bottom of the range and that there was room to rally again with resistance at about 7,132 from that new downtrend. It tested this level multiple times throughout the day and got rejected until the late day rally finally got it through as it closed above it at 7,137.90. This now gives it a new uptrend for tomorrow but it will need to gap up in order to open above it as its new primary uptrend (white) will be at 7,157. If it fails to get that gap up, this will be the first resistance level to watch. There will also be more resistance just above that at 7,165 from its prior uptrend (blue). And if there's a big rally, its primary uptrend would be the next resistance at 7,240-7,245.
However, if it fails to get this gap up and we get a pullback, supports to watch will be at 7,127 (orange), 7,088 (yellow), and then 7,057 (purple). There would also still be weekly support at 7,045-7,050 which it held during yesterday's pullback.
The Russell 2000 broke just below its primary uptrend support from yesterday which was at about 2,772 which I mentioned in yesterday's update. It hit a low of 2,770.02 before the end of day rally where it closed at 2,785.37. This break and close back above it gives it a failed breakdown which starts a new uptrend for it. But, it will also need to gap up tomorrow above this new uptrend in order for it to be support.
The first level to watch will actually be from today's failed breakdown (yellow) at 2,796-2,797. Then its primary uptrend (white) will be a little lower at 2,793-2,794. So it needs to gap above both of these levels for them to be support. If not, they'll act as resistance on a rally attempt. And if it fails to open above them and there's a pullback, the key support level to watch will be at 2,732 from its prior uptrend (purple).
