By Michael Ashbaugh, MarketWatch
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Technically speaking, the U.S. benchmarks’ nearly straightline 2019 rally attempt has accelerated in recent sessions, fueled partly by the Federal Reserve’s dovish-leaning policy shift.
Against this backdrop, the S&P 500 has rallied within view of a headline technical test — the 200-day moving average, currently 2,742 — and the pending selling pressure near resistance, or lack thereof, will likely add color.
Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX +0.14% hourly chart highlights the past two weeks.
As illustrated, the S&P has staged a bull-flag breakout, extending its rally attempt.
Tactically, the 2,710 area pivots to notable support, and is followed by a deeper floor matching the 2017 close (2,673).
Conversely, major resistance matches the May peak (2,742) and the 200-day moving average, currently 2,741.76.
Similarly, the Dow Jones Industrial Average has extended its rally attempt.
The prevailing upturn punctuates a successful retest of the 200-day moving average, currently 24,991. The Dow has registered four straight closes atop the trending indicator.
Against this backdrop, the Nasdaq Composite continues to take flight.
Here again, the index has broken from a flag-like pattern hinged to the 7,274 inflection point, also illustrated below.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has launched from its breakout point, an area closely matching the 2017 peak (7,004). Recent strength confirms the Nasdaq’s intermediate-term uptrend.
Slightly more broadly, the prevailing upturn places the 200-day moving average, currently 7,454, within striking distance. As always, the 200-day is a widely-tracked longer-term trending indicator, and the pending retest should be a useful bull-bear gauge.
Looking elsewhere, the Dow Jones Industrial Average has extended its break from trendline resistance.
Moreover, this is the lone widely-tracked U.S. benchmark positioned atop its 200-day moving average, currently 24,991. The Dow is vying for a fifth straight close higher early Tuesday.
On further strength, an inflection point matches the June peak (25,402) and is followed by former gap resistance (25,550).
Similarly, the S&P 500 has extended a break atop its former trendline.
On further strength, major resistance (2,742) closely matches the 200-day moving average, currently 2,741.76.
The bigger picture
Collectively, the U.S. benchmarks’ bigger-picture backdrop continues to strengthen.
On a headline basis, the Dow Jones Industrial Average has sustained a break atop the 200-day moving average, observing this area as support. Meanwhile, the S&P 500 and Nasdaq Composite have extended recent trendline breakouts, rising within view of the 200-day moving average.
This is bullish price action, though the pending retests of the 200-day mark a potential “watch out.”
Moving to the small-caps, the iShares Russell 2000 ETF has extended its rally atop the breakdown point. The former range top (147.90) pivots to near-term support.
Conversely, additional overhead broadly spans from about 153.60 to 154.50.
Similarly, the SPDR S&P MidCap 400 has extended its rally attempt.
Tactically, a near-term floor (331.40) is followed by firmer trendline support (325.25).
Combined, the small- and mid-cap benchmarks — as well as the big three U.S. benchmarks — have sustained breaks atop the 50-day moving average amid still muted early-2019 selling pressure.