By Michael Ashbaugh, MarketWatch
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Technically speaking, the major U.S. benchmarks continue to take flight as the early-January volatility spike fades.
Against this backdrop, the S&P 500 and Nasdaq Composite have registered their latest record highs, as the slightly lagging behind Dow industrials continue to press the 29,000 mark.
Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX -3.03% hourly chart highlights the past two weeks.
As illustrated, the S&P has extended its rally to record territory, rising from a successful test of its breakout point (3,258).
More broadly, the prevailing upturn originates from familiar support (3,215) closely matching the December gap.
Meanwhile, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -3.15% has not extended its breakout.
Still, its near-term backdrop remains comfortably bullish. The index has pulled in modestly from record highs after briefly tagging the 29,000 mark.
Tactically, a near-term floor (28,872) is followed by an inflection point matching the 2019 peak (28,701).
True to recent form, the Nasdaq Composite's /zigman2/quotes/210598365/realtime COMP -2.77% near-term backdrop remains the strongest.
The index has registered a record close across three of the prior four sessions, outpacing the other benchmarks.
Tactically, near-term support (9,158) is followed by the breakout point (9,093) and the deeper 2019 peak (9,052).
Widening the view to six months adds perspective.
On this wider view, the Nasdaq continues to take flight. The prevailing leg higher punctuates a jagged 2020 start, a downturn that filled the early-year gap.
More broadly, the chart illustrates a powerful two-month uptrend, punctuated by shallow and short-lived pullbacks. Tactically, a notable floor spans from about 8,909 to 8,943, levels matching the late-December and January lows.
Looking elsewhere, the Dow Jones Industrial Average is pressing the 29,000 mark.
Recall that the prevailing upturn originates from the Dow’s first notable support. The late-December low (28,376) closely matched gap support (28,381) punctuating a successful retest.
Delving deeper, the 50-day moving average is rising toward the former breakout point (28,175). The Dow’s intermediate-term bias remains bullish barring a violation of this area.
Meanwhile, the S&P 500 has extended its latest break to previously uncharted territory.
Here again, the prevailing upturn originates from gap support (3,215). The month-to-date low (3,214.6), established last week, has matched the inflection point.
The bigger picture
Collectively, the major U.S. benchmarks are off to a strong 2020 start.
Each index has confirmed its primary uptrend, breaking relatively decisively to record territory in the wake of early-month volatility.
Against this backdrop, the S&P 500 has already registered a bullish 1.8% breakout versus the 2019 close.
Moving to the small-caps, the iShares Russell 2000 ETF has not extended its uptrend.
Nonetheless, the small-cap benchmark has sustained its December break to 52-week highs. Tactically, resistance matches the 2019 peaks, an area spanning from 166.68 to 167.12.
Also recall that the so-called “January effect” — a seasonal rotation toward small-caps — has not surfaced to this point. To the contrary, large-cap technology has disproportionately contributed to early-year gains.
Similarly, the SPDR S&P MidCap 400 ETF has registered a sluggish 2020 start.
Still, the MDY has maintained its breakout point (370.50) preserving a firmly-bullish backdrop. The 50-day moving average is rising toward support.