By Michael Ashbaugh, MarketWatch
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Broadly speaking, the major U.S. benchmarks are off to a constructive October start, reclaiming key technical levels.
Against this backdrop, the S&P 500 has asserted a bullish-leaning intermediate-term bias, rising to three-week highs from a successful test of major support (3,328).
Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX +0.56% hourly chart highlights the past two weeks.
As illustrated, the S&P has extended its rally attempt, reaching three-week highs.
The prevailing upturn punctuates last week’s range, underpinned by major support (3,328).
From current levels, the breakout point (3,393) marks a near-term floor, a level matching the February peak.
Similarly, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.12% has cleared its range top.
Here again, the breakout punctuates a successful test of major support (27,447) a level that underpinned last week’s price action on a closing basis.
More immediately, the 28,000 mark remains an inflection point.
Meanwhile, the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.22% is challenging its range top.
The prevailing upturn punctuates a jagged, but successful, test of the 50-day moving average, an area better illustrated on the daily chart below.
Tactically, a notable floor matches the mid-September range top (11,245).
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has extended its rally attempt, notching a “higher high” versus the mid-September peak (11,245).
The prevailing upturn punctuates a successful test of the 50-day moving average, currently 11,113, a recent bull-bear inflection point.
Tactically, the sustained break atop the 50-day moving average — combined with a “higher high” to start October — signals a bullish-leaning intermediate-term bias.
Looking elsewhere, the Dow Jones Industrial Average has extended a rally atop key resistance.
The specific area matches the breakdown point (27,580) and the 50-day moving average, currently 27,684.
The Dow’s sustained rally atop resistance signals a bullish-leaning intermediate-term bias. Recall that the 50-day moving average defined the May, June and late-July lows.
Meanwhile, the S&P 500 has also extended its rally attempt, edging atop next resistance (3,393).
In the process, the S&P has reclaimed its 50-day moving average, currently 3,369.
Slightly more broadly, the upturn punctuates a successful test of major support (3,328), a bull-bear inflection point detailed repeatedly.
The bigger picture
Collectively, the major U.S. benchmarks are acting well technically to start October, and the fourth quarter.
On a headline basis, the S&P 500 and Dow industrials have extended their rally attempts, rising from successful tests of major support — S&P 3,328 and Dow 27,447. (See the hourly charts.)
Moving to the small-caps, the iShares Russell 2000 ETF has extended a rally from the September low.
In the process, the small-cap benchmark has reclaimed its 50-day moving average and the breakdown point (153.39).
The breakout neutralizes the September downdraft. Tactically, additional overhead matches the August peak (159.82).
Meanwhile, the SPDR S&P MidCap 400 ETF has also reclaimed its 50-day moving average.
The prevailing follow-through punctuates an October upturn initially fueled by increased volume.