By Michael Ashbaugh, MarketWatch
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Technically speaking, the major U.S. benchmarks have asserted a December holding pattern, digesting early-month rallies to record territory.
In the process, the S&P 500 and Nasdaq Composite have maintained notable support matching the November peaks — S&P 3,646 and Nasdaq 12,244 — amid a still comfortably bullish intermediate-term backdrop.
Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX -0.48% hourly chart highlights the past two weeks.
As illustrated, the S&P is digesting the early-December break to record highs.
The prevailing range has been underpinned by major support matching the November peak (3,646), detailed previously.
Monday’s session low (3,645.8) matched support to punctuate a successful retest.
Meanwhile, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -1.50% is also traversing a jagged near-term range.
The index briefly tagged a record high Monday — by a narrow six-point margin — before reversing to close near session lows.
Tactically, the early-November peak (29,964) remains an inflection point, also detailed on the daily chart.
Against this backdrop, the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.56% has rallied from major support.
The specific area matches the November peak (12,244), detailed repeatedly.
Recall that Friday’s session low (12,246) registered nearby to punctuate a successful retest.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq is digesting a decisive late-year breakout. The initial rally encompassed seven record closes across a nine-session span.
More immediately, the November peak (12,244) — detailed previously — has underpinned the prevailing range. Bullish price action.
Delving deeper, additional support holds in the 12,108-to-12,114 area, and is followed by the firmer breakout point (12,074).
Looking elsewhere, the Dow Jones Industrial Average is digesting a less decisive December breakout.
Tactically, the former breakout point (29,964) remains an inflection point, also detailed on the hourly chart.
Separately, the Dow has maintained a posture atop the 20-day moving average, currently 29,854, a widely-tracked near-term trending indicator.
More broadly, the relatively tight December range is a bullish continuation pattern. A near-term target continues to project to the 30,700 mark.
Meanwhile, the S&P 500 is also digesting a break to record highs.
To reiterate, the prevailing range has been underpinned by the breakout point (3,646) an area matching the November peak (3,645.99) and the Dec. 1 gap (3,645.87).
The bigger picture
Collectively, the major U.S. benchmarks continue to digest previously aggressive late-year rallies to record territory.
Still, the recent pullbacks have been relatively shallow, thus far inflicting limited damage in the broad sweep.
In fact, the S&P 500 and Nasdaq Composite have both maintained their first notable support matching the November peak — S&P 3,646 and Nasdaq 12,244. (See the hourly charts.)
Moving to the small-caps, the iShares Russell 2000 ETF is also digesting a December break to record territory.
The prevailing range marks the third consecutive flag-like pattern hinged to the initial early-November breakout.
Similarly, the SPDR S&P MidCap 400 ETF has asserted a higher plateau at record territory.
Here again, the prevailing range marks the third straight flag-like pattern.