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 major U.S. benchmarks continue to whipsaw, though against an increasingly range-bound backdrop.
Amid the cross currents, the S&P 500 has started September with its latest failed test of the range top, an area closely matching the 50-day moving average.
Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX -1.57% hourly chart highlights the past two weeks.
As illustrated, the S&P remains range-bound. Major resistance matches the range top (2,943) and the 50-day moving average, currently 2,944.
Tuesday’s early downturn punctuates a fourth failed retest of resistance across as many weeks.
Similarly, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -1.57% is traversing an increasingly familiar range.
In its case, the range top (26,427) is followed by the more distant 50-day moving average.
Conversely, recall that the late-August upturn punctuated a successful test of the 200-day moving average, an area also illustrated on the daily chart.
Perhaps not surprisingly, the Nasdaq Composite’s /zigman2/quotes/210598365/realtime COMP -1.89% backdrop is equally jagged.
Here again, the index has stalled near resistance (8,059) roughly matching the 50-day moving average, currently 8,045.
This area effectively defines the August range top, and is also detailed below.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq’s prevailing range remains well-defined. To reiterate, major resistance matches the range top (8,059) and the 50-day moving average, currently 8,045.
Conversely, near-term support (7,716) is followed by a major floor (7,670) matching the late-2018 range top. (The Nasdaq 7,670 level corresponds with S&P 2,817.)
Looking elsewhere, the Dow Jones Industrial Average has also whipsawed amid a recent volatility spike.
Tactically, the 200-day moving average, currently 25,626, has effectively underpinned the prevailing range. (The Dow registered two mid-August closes slightly under the 200-day.)
Within the range, the 25,950 and 26,250 areas remain inflection points, levels followed by the firmer range top (26,427). The August close (26,403) registered slightly under resistance, punctuating a failed breakout attempt.
Similarly, the S&P 500 has once again balked near well-defined resistance.
Consider that Friday’s session high (2,940) registered just under the range top (2,943) and the 50-day moving average, currently 2,944. The S&P has pulled in respectably from resistance early Tuesday.
The bigger picture
As detailed above, the major U.S. benchmarks continue to whipsaw, though against an increasingly range-bound backdrop.
The soft September start, early Tuesday, punctuates each benchmark’s latest failed test of the range top.
Moving to the small-caps, the iShares Russell 2000 ETF /zigman2/quotes/209961116/composite IWM -1.14% has reversed from the range bottom after briefly tagging seven-month lows last week.
Tactically, the 148 area remains an inflection point, and is followed by the 200-day moving average, currently 150.80. The late-August downturn originated from the 200-day, and an eventual close higher would mark progress.
Meanwhile, the SPDR S&P MidCap 400 remains incrementally “stronger” rising from a successful test the August low.
More broadly, the MDY has whipsawed at the 200-day moving average, currently 341.10, and it remains capped by the breakdown point (345.40). Bearish price action.