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Key Support Levels Back in Focus
Technical Outlook and Market Thoughts
Major Market Levels
Nasdaq
Support To Hold: 25,250
Price To Clear: 26,250
All-Time High Level: 26,750 (27,190 on 6/1)
Bearish Breakdown Level: 24,500
The Nasdaq was down 2.9% for the week but is still up 10% for the year. Key support at 25,250 was also Friday’s intraday low and keeps the current trading range from June 5th up to 26,750 intact. This time period has now been stretched to 29 sessions. A tighter trading range of 1,000 points to 26,250 has been playing out over the past 18 sessions. Multiple closes below 25,250 would increase the risk of a decline toward 24,750-24,500, which would represent 9%-10% pullbacks from the all-time high. The June 9th low at 24,980 and the June 26th bottom at 25,014 represented 8% declines.
Resistance remains at 26,250. Continued closes above this level gets 26,750-27,000 back in focus with the record high from June 1st at 27,190.
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S&P 500
Support To Hold: 7,400
Price To Clear: 7,625 (blue-sky territory)
All-Time High Level: 7,600 (7,620 on 6/2)
Bearish Breakdown Level: 7,225
The S&P fell 1.6% for the week to lower its 2026 gain to 9% YTD. Key support at 7,500 and the 50-day and 20-day moving averages failed to hold. This reopened risk to 7,425-7,400. A move below the latter gets 7,225 and the June 9th low at 7,237 in play. The latter represented a 5% slide from the all-time peak with 7,100 an -8% beatdown.
Resistance is at 7,500 followed by 7,575. Closes above 7,600 would be a renewed bullish signal for fresh record highs up to 7,750 and our May 15th upper end price target.
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Russell 2000
Support To Hold: 2,925
Price To Clear: 3,000
All-Time High Level: 3,050 (3,046 on 7/1)
Bearish Breakdown Level: 2,875
The Russell dipped 0.5% for the week but has still soared 19% in 2026. Crucial support from July 9th at 2,925 held with Friday’s bottom at 2,934. We have been warning a clean break below 2,925 and the 50-day moving average (now at 2,921) would likely get early June support at 2,800 back in focus. We have been saying since mid-June, the 2,925 level needs to hold into earnings season and late July to keep the overall market pushing higher highs.
The index tapped an all-time high of 3,046 on July 1st with our June 12th upside targets at 3,150-3,200. This upside was based on 3,000 holding and a level last seen on July 7th. Our June 12th near-term upside targets are at 3,150-3,200.
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Dow Jones Industrial Average
Support To Hold: 52,000
Price To Clear: 53,000
All-Time High Level: 53,294 (on 7/7)
Bearish Breakdown Level: 50,500-50,000
The Dow dropped 0.9% for the week and has advanced 9% for the year. The blue-chips held 52,000 for the fourth-time this month with Friday’s low kissing 51,992. We have been harping about additional support levels in roughly 500-point intervals on closes below 52,000. Multiple closes below 50,000 would signal a near-term top has possibly formed.
The index is just outside its uptrend channel with resistance at 52,500-53,000. Closes above the latter and our April 17th upper end price target gets the record peak at 53,294 in focus with 55,000 still a possibility over the near-term.
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S&P 500 Volatility Index (VIX)
Initial Warning Level (Slightly Bearish): Multiple closes above 18.50-20
Bearish Market Signal: Multiple closes above 22-24
Lower Volatility Targets (Ongoing Bullishness): 15 (maybe 13.50-12.75)
The VIX was just outside the 15 level coming into last week but failed to make a lower low. The top of the downtrend channel was tested on Tuesday and Thursday before Friday’s surge to 19.50. The close above 18.50 and the 50-day and 200-day moving averages was a bearish signal if higher highs are made on Monday and into Tuesday. We have been a broken record saying closes above 22-24 on the VIX would be a bearish development for the market.
There is a slight chance Friday’s action was “stretch” but only if the bulls can recover 17.50-16.50 by Monday’s closing bell. More important and concrete support remains at 15.
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Earnings and Economic News
Before the open: AMC Entertainment (AMC), Domino’s Pizza (DPZ), Ryanair (RYAAY), Smart Financial (SMBK)
After the close: Crown Holdings (CCK), Steel Dynamics (STLD), Calix (CALX). Zions Bancorporation (ZION)
Economic News
Leading Indicators – 10:00am
Commentary
The Financial sector tried taking the market to higher highs last week but the bulls inability to do so midweek after solid results from many of the top companies was a bearish signal. Friday’s action pushed the major indexes to the edge of crucial support levels just as the second quarter earnings season gets into full swing.
We have talked about a continued run to fresh all-time highs into July and possibly August but that statement could be in jeopardy if a return to June lows and backup support levels start to come into focus.
The action in the VIX was particularly concerning for the bulls as volatility often leaves the first clue ahead of a major trend change in the market. We will have to see if Friday’s action was indeed a warning shot from the bears or another overreaction before earnings get into full swing.
Last week, we mentioned the bulls like to take the stairs to higher highs while the bears like to take the elevator to lower lows. As we head to press, futures are showing a mixed Monday open.
Dow futures are down 38 points while the Nasdaq futures are up 82. The S&P futures are lower by adding seven points and the Russell futures are down two ticks.
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