These are the most important S&P 500 and Nasdaq levels to watch right now, says this strategist

The strategist said a late bounce seen last week for those big indexes pushed them back above key support levels, but they remain vulnerable. “Thankfully, the support/resistance levels are still very well drawn,” he told clients in a note late Sunday.

Sharp declines seen earlier last week took those indexes below the “necklines” of their “head and shoulders” technical patterns, a widely followed trend reversal pattern for stock charts. The bounce starting Thursday helped those indexes regain their “lines in the sand” by week’s end.

However, the declines earlier in the week gave both indexes “lower lows” on a closing and intraday basis.

“Therefore, unless the bounces that began last week can see a lot more upside follow-through, last week’s action was still something to be very concerned about,” said Maley, who advises watching last week’s closing S&P 500 low of 4,225.

“Any meaningful break below that line will take it well below the ‘neckline’ of its ‘H&S’ pattern…and that would be a very negative development,” said Maley. But if the index can rally back and take out February highs of 4,590 “in any material way,” that will usher in a solid “higher-high” and much needed relief,” he said.

As for the Nasdaq, Maley said the technical setup is similar. Any “significant break” below last week’s closing lows around 13,500 will give it a “lower-low” and take it below that neckline — a bearish development. On the flip side, a break above February’s high of 15,140 would offer up a “higher-high” easing a lot of market tension.

Maley also commented on the fact that a big washout decline for stocks, that can usher in an important bottom, hasn’t happened. “We haven’t seen a few days when the volume has been huge…and the breadth absolutely horrible,” he said.

He isn’t as worried because he said those washout moves, while compelling, can also cause investors to “miss the boat” by waiting for them to buy stocks. Maley said he would reassess the team’s near-term stance if big indexes break above key resistance,

The buzz

Ukranian and Russian delegates are currently on the Belarusian border while fighting continues in Ukraine, following a tense weekend that saw Russian President Vladimir Putin up tensions by moving the country’s nuclear forces to high alert. Belarus troops reportedly may be ready to fight alongside Russia.

Russia’s central bank doubled interest rates and shut stock markets on Monday, after Western allies agreed to cut off some Russian banks from the SWIFT global payments system. The ruble RUBUSD, -11.47% has been in free fall and listed stocks in London slumped.

European and U.S. defense contractors — Raytheon RTX, +4.11%, Northrup NOC, +4.00% and General Dynamics GD, +4.32% — are surging on Germany’s surprise move to raise military spending, and send weapons to Ukraine.

Berkshire Hathaway BRK.A, +3.73% BRK.B, +3.56% CEO Warren Buffett said there is “little that excites us” in the U.S. stock market, in his annual shareholder letter released on Saturday morning. Its energy unit pledged to keep reducing carbon emissions.

First Horizon FHN, +4.64% stock is poised for a 15-year high following a $13.4 billion buyout deal with TD Bank TD, +3.14%.

A United Nations report shows climate change is racing ahead of the world’s efforts to adapt.

Earnings from Avis Budget CAR, +7.30%, Marriott MAR, +3.33% and Advance Auto Parts AAP, +2.37% are ahead.

An advance report on January trade in goods is ahead, in a week that will give us the Institute for Supply Management’s latest report and payrolls data for February.

The markets

Stock futures YM00, -0.80% ES00, -0.96% NQ00, -0.98% are deep in the red, with Dow futures down over 400 points, as investors flocked to bonds TMUBMUSD10Y, 1.918%, the U.S. dollar DXY, +0.33% and gold GC00, +1.28%. European stocks SXXP, -0.84% are also under pressure, with financial stocks sinking. Crude CL00, +4.51% was up 4% to trade at more than $95 a barrel, and Goldman Sachs lifted its Brent BRN00, +4.46% target to $115, from a current $98 a barrel.

The tickers

These were the top traded tickers on MarketWatch as of 6 a.m. Eastern Time:

The chart

Here’s a refresher chart from Goldman on the commodities that Russia produces:

Random reads

Airbnb will offer free, short-term housing for 100,000 Ukrainian refugees.

Here’s how some are helping Ukraine’s animals.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

Want more for the day ahead? Sign up for The Barron’s Daily, a morning briefing for investors, including exclusive commentary from Barron’s and MarketWatch writers.