Markets continued their rebound today with tech leading this time as the Nasdaq closed up 0.9% while the Russell 2000 gained an additional 0.7% and the S&P posted a gain of 0.47%. The VIX fell another 2.25% to close at $17.36. Semiconductors were strong again with NVDA closing up another 2.5% gain after Friday's huge gain of nearly 8%. TSM was another winner in the semiconductor space as it gained almost 2% today on top of Friday's 5.5% gain. I've been mentioning the massive bullish flows in both of these names over the past few weeks and it's hard to be bearish when I'm seeing massive flows like this every day - in other names as well.
Looking at technical levels for tomorrow, the Nasdaq started a new downtrend on the daily but it was a very strong finish again and it's very likely to open above this new downtrend tomorrow. It's very similar to Friday's action with the new downtrend but strong finish. So the first big level to watch tomorrow will be from this new downtrend (white) which will be at about 23,090. It closed at 23,238 today, well above this 23,090 level, so it will likely open above it and that level will be support on a pullback. In the unlikely event that it does gap below 23,090 (about 0.6% away) then that level will be resistance. From here, the next resistance level to watch on a continuation of this rally will be at about 23,385 from its prior uptrend (purple).
One thing that is notable is that the Nasdaq did open below its weekly retest support (see the weekly update) at about 23,050 this morning. It did break through it, but it still is in a new weekly downtrend with that next big resistance at about 23,535 which will be a big resistance level to watch this week.
The S&P opened above its last downtrend resistance around 6,903 that I mentioned in the previous daily update. It did pullback to retest this area which held early in the morning as the S&P put in a low of 6,905.87 and continued to push higher. Since it closed above its last downtrend, it now starts a new uptrend (white) on the daily which it almost tested today. The resistance from the new uptrend for today was at about 6,981-6,982 and it got up to 6,980. Resistance from this new uptrend will be higher tomorrow at about 7,020. On the other hand, if we do get a pullback tomorrow then the 6,890 level will be the first big support to watch will also be from this new uptrend. After that, its prior downtrends will come into play again with supports at about 6,875 (purple) and 6,862 (yellow).
The Russell 2000 also closed above its last downtrend, starting a new uptrend (white) on the daily. But, there is risk of opening below/outside of this new uptrend tomorrow as it will be higher than where it closed today. The key level to watch for tomorrow will be at about 2,696 from this new uptrend. Since the Russell closed at 2,689 today it will need to gap up a bit (about 0.25%) to open above this. If it fails to do that, then the 2,696 area will be resistance on a rally attempt and we will have to wait and see whether or not it can break through it and close above it for a failed breakdown. And if it does get the gap up above 2,696, then that area becomes support. On a pullback, the next support to watch would be at about 2,630 from its prior downtrend (yellow) that it closed above today.
