By Michael Ashbaugh, MarketWatch
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Technically speaking, the U.S. benchmarks’ bull trend has thus far weathered a jagged 2020 start amid heightened geopolitical tensions.
Against this backdrop, each big three benchmark has initially maintained its first notable support — including S&P 3,215 — vacillating amid January selling pressure that, to this point, has inflicted limited damage.
Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX +1.45% hourly chart highlights the past two weeks.
As illustrated, the S&P has rallied from its first notable support (3,215) an area detailed repeatedly.
Monday’s session low (3,214.6) punctuated a successful retest.
The bullish reversal places the S&P’s record high (3,258) within striking distance.
Similarly, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.22% has reversed from its range bottom.
Consider that Monday’s close (28,703) closely matched the 2019 peak (28,701).
On further strength, the Dow’s record peak (28,872) — established Jan. 2 — remains within striking distance.
Against this backdrop, the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.77% has registered an equally jagged 2020 start.
Still, the index has thus far maintained a notable floor matching its former target (8,975) and the 2019 close (8,972.6).
Collectively, Monday’s close marked each big three U.S. benchmark’s second-best close on record.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has whipsawed near record territory to start 2020.
Tactically, a near-term floor (8,909) matches the range bottom, an area also detailed on the hourly chart. Delving deeper, the November peak (8,705.9) marks firmer support, a level matching the Nasdaq’s former projected target from the October low (8,705).
Similarly, the Dow Jones Industrial Average is off to a jagged January start, though it has sustained the late-2019 breakout.
Tactically, recall that last week’s low (28,376) closely matched gap support (28,381). The successful retest is technically constructive, preserving its latest breakout.
Meanwhile, the S&P 500 has also maintained its first notable floor.
To reiterate, support matches the December gap (3,216) and the S&P’s former projected target (3,215) detailed previously.
The week-to-date low (3,214.6) has matched support, punctuating a successful initial retest.
Also notice the three consecutive closes firmly off session lows to start 2020. Constructive price action.
The bigger picture
Collectively, the U.S. benchmarks’ bigger-picture backdrop remains constructive despite an admittedly jagged 2020 start.
Each big three benchmark quietly registered its second-best close on record Monday, largely shrugging of recent geopolitical concerns — at least for now.
Moving to the small-caps, the iShares Russell 2000 ETF remains the weakest widely-tracked U.S. benchmark.
Still, the IWM has sustained a recent break to 52-week highs. Recall that notable support spans from about 162.50 to 162.80, levels matching the top of the gap and the breakout point respectively.
Meanwhile, the SPDR S&P MidCap 400 ETF has maintained its breakout point (370.50), punctuating an orderly pullback from record highs. .
Slightly more broadly, the small- and mid-caps diverged slightly to start January, failing to register a first-day-of-the-year breakout along with the big three U.S. benchmarks.
So the relative underperformance persists against a still comfortably bullish backdrop.
Looking elsewhere, the SPDR Trust S&P 500 is digesting its latest break to record territory.