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Michael Ashbaugh

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June 23, 2020, 12:54 p.m. EDT

Charting a bullish summer start, Nasdaq takes flight to record territory

Focus: Gold challenges seven-year highs, Biotech sector reaches record territory, Apple asserts bullish continuation pattern, GLD, XBI, AAPL, SPLK, HOLX

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By Michael Ashbaugh, MarketWatch

Editor’s Note: This is a free edition of The Technical Indicator, a daily MarketWatch subscriber newsletter. To get this column each market day, click here.

Technically speaking, the U.S. benchmarks’ bigger-picture backdrop remains bullish, on balance, despite increasingly uneven market price action.

On a headline basis, the Nasdaq Composite has taken flight — reaching record highs, atop the 10,000 mark — while the S&P 500 remains range-bound, digesting a sharp reversal from the June low.

Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX +0.06%  hourly chart highlights the past two weeks.

As illustrated, the S&P has asserted a one-week range, digesting the bullish reversal from the June low.

The range top closely matches the November peak (3,154). The S&P has registered tandem session highs within one point of resistance.

Similarly, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.17%  remains range-bound.

In its case, the 200-day moving average, currently 26,306, has marked a recent sticking point. The latest retest from underneath is underway Tuesday.

Conversely, the prevailing range bottom has matched major support (25,758), an area also detailed on the daily chart.

True to recent form, the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -0.87%  remains the strongest major benchmark.

In fact, Monday’s close (10,056) marked the Nasdaq’s best close on record. The index has followed through to uncharted territory early Tuesday.

The prevailing upturn punctuates a successful test of first support (9,868).

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has sustained the late-June rally atop its former breakout point (9,838).

The prevailing one-week range signals muted selling pressure near record highs, laying the groundwork for Tuesday’s early follow-through. An intermediate-term target projects to the 10,610 area.

Looking elsewhere, the Dow Jones Industrial Average remains the weakest major benchmark.

Recall that the 200-day moving average defined the recent bearish island reversal. The Dow is vying to snap a stretch of eight straight closes under the 200-day.

Conversely, familiar support matches the May peak (25,758) and the February gap (25,752), an area also detailed on the hourly chart.

Delving deeper, major support matches the June 2019 low (24,680) and February 2020 low (24,681). Also recall the ascending 50-day moving average, currently 24,822, a level that underpinned the May low. The Dow’s recovery attempt is intact barring a violation.

Meanwhile, the S&P 500 is digesting a bullish reversal from major support (2,954).

To reiterate, the prevailing upturn has effectively nailed the November peak (3,154). Tandem session highs last week registered within one point.

The bigger picture

As detailed above, the major benchmarks remain in divergence mode — each index is doing different things — though the bigger-picture backdrop is constructive.

Broadly speaking, each benchmark’s intermediate-term bias remains bullish.

Moving to the small-caps, the iShares Russell 2000 ETF remains capped by its 200-day moving average, currently 147.00.

Conversely, trendline support tracks the 50-day moving average, currently 133.20, and is rising toward the breakout point (136.20). The prevailing recovery attempt is intact barring a violation.

Similarly, the SPDR S&P MidCap 400 ETF has stalled near its 200-day moving average, currently 336.72.

Here again, the 50-day moving average is rising toward the breakout point.

/zigman2/quotes/210599714/realtime
US : S&P US
3,351.28
+2.12 +0.06%
Volume: 2.28B
Aug. 7, 2020 5:10p
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,433.48
+46.50 +0.17%
Volume: 324.93M
Aug. 7, 2020 5:10p
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/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
11,010.98
-97.09 -0.87%
Volume: 3.85M
Aug. 7, 2020 5:16p
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