By Michael Ashbaugh, MarketWatch
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Technically speaking, the major U.S. benchmarks have reversed sharply from the March low, rising in the wake of an historic market downdraft.
In the process, the S&P 500 has spiked Tuesday from major support (2,190), rising amid a bigger-picture technical backdrop (including sentiment) that may be sufficient to support at least an intermediate-term market low.
Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX +0.24% hourly chart highlights the past two weeks.
As illustrated, the S&P has reversed from its latest three-year low.
In the process, the index has initially maintained its next notable floor — the mid-2016 range top (2,190) — detailed previously. The quality of the prevailing rally attempt should add color.
Similarly, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.13% has reversed from three-year lows.
The March low (18,213) marks the Dow’s worst level since November 2016.
Also consider that three of the prior four closes have registered under the 20,000 mark. Tactically, near-term overhead (19,882) is followed by the post-breakdown peak (20,531).
Against this backdrop, the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.92% remains relatively stronger.
The index slipped just 0.3% Monday while the S&P 500 and Dow industrials notched daily downdrafts of about 3.0%.
Tactically, the session close (6,860) roughly matched first resistance, and the Nasdaq has extended its rally attempt early Tuesday.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has reversed from 14-month lows.
Consider that Tuesday’s early session low (7,184) roughly matched first resistance (7,194) and the index has followed through. Constructive price action.
From current levels, the pending test of the breakdown point — the 7,700-to-7,712 area — should be a useful bull-bear gauge. A swift reversal atop this area would mark technical progress.
Looking elsewhere, the Dow Jones Industrial Average has registered a more aggressive March downdraft.
The index snapped a stretch of 10 straight 1,000+ point daily ranges in Monday’s action.
Still, the Dow has registered 11 straight 900+ point daily ranges, and is currently working from a lower base under the 20,000 mark. (I.e. It is mathematically more difficult to register a 1,000-point move as the Dow’s nominal level shrinks.)
Meanwhile, the S&P 500 has reversed from three-year lows.
More immediately, Tuesday’s early session low (2,344) has closely matched first resistance (2,346). This area matches the 2018 low, and is better illustrated on the four-year chart, detailed in the next section.
The bigger picture
Collectively, the major U.S. benchmarks are attempting to rally in the wake of an historic early-2020 market downdraft.
The scope of each benchmark’s plunge from its record close, to Monday’s close, falls out as follows: