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Michael Ashbaugh

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Jan. 10, 2017, 12:31 p.m. EST

Charting a slow-motion breakout attempt: Back for another crack at Dow 20,000

Focus: Apple’s breakout attempt, Telecom pulls in to support, IYZ, AAPL, AGCO, VG, ON

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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’ strong bull trend is firmly intact.

Consider that the S&P 500 continues to press record territory, after briefly reaching all-time highs last week. Meanwhile, the Nasdaq Composite has broken out, confirming its uptrend, while the Dow Jones Industrial Average remains within striking distance of the marquee 20,000 mark.

Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX +0.36%  hourly chart highlights the past two weeks.

As illustrated, the S&P has pulled in modestly from a nominal record high.

Last week’s close of 2,277 matches the December peak, and first resistance. Conversely, a near-term inflection point holds around 2,263, and is followed by firmer support at 2,252.

Meanwhile, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.88%  has pulled in modestly from the 20,000 mark.

The index topped last week at 19,999.63 — just 0.37 points under the milestone — and has subsequently extended the pullback to first support.

From current levels, the Dow’s first notable floor holds around 19,750, an area also illustrated on the daily chart.

Looking elsewhere, the Nasdaq Composite has sustained a slight break to record territory, outpacing the S&P and the Dow.

First support rests at the December peak of 5,512, and is followed by a deeper floor at 5,487, matching the Nasdaq’s former record close.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has confirmed its uptrend, reaching another all-time high. Consider that a projected target of 5,570 is within striking distance.

Conversely, support broadly spans from 5,487 to 5,512, and is followed by an inflection point matching the 20-day moving average, currently 5,462.

Moving to the Dow, the blue-chip benchmark topped last week at 19,999.

Technically, notable resistance spans from the December peak of 19,987 to the 20,000 mark.

Conversely, the Dow has maintained a posture atop the 20-day moving average, currently 19,884, on a closing basis. The index has not closed under the 20-day since Nov. 4.

Also recall that firmer support holds around 19,750, detailed previously.

Similarly, the S&P 500 has pulled in from a nominal record high.

Consider that its one-month range effectively spans from about 2,250 to 2,277. The index has tried to break lower, and higher, thus far concluding with a bull-bear stalemate.

Separately, the S&P’s 50-day moving average, currently 2,210, closely matches notable support at 2,214.

The bigger picture

Technically speaking, the U.S. benchmarks are off to a constructive 2017 start. Each index reached all-time highs last week, and the ensuing selling pressure remains muted.

Moving to the small-caps, the iShares Russell 2000 ETF /zigman2/quotes/209961116/composite IWM +2.00% has thus far sustained its breakout.

Recall that first support matches the 2016 close of 134.85.

The IWM closed Monday five cents lower, at 134.80, and has maintained support with Tuesday’s early upturn.

+12.63 +0.36%
Volume: 1.42B
Nov. 23, 2020 2:06p
US : Dow Jones Global
+258.46 +0.88%
Volume: 217.09M
Nov. 23, 2020 2:06p
US : U.S.: NYSE Arca
$ 181.05
+3.55 +2.00%
Volume: 13.27M
Nov. 23, 2020 2:06p
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