By Michael Ashbaugh, MarketWatch
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Technically speaking, the major U.S. benchmarks continue to whipsaw amid a volatile October start.
Against this backdrop, the S&P 500’s intermediate-term bias remains in flux as it vacillates near a headline bull-bear inflection point (2,940). More broadly, technical damage has been inflicted, and the bigger-picture backdrop is not one-size-fits-all.
Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX +0.45% hourly chart highlights the past two weeks.
As illustrated, the S&P has registered a sizeable early-October whipsaw.
Amid the volatility, the rally attempt has stalled at the 2,960 mark, a level matching the top of the September gap.
Separately, recall that major resistance matches the August range top (2,943) and the 50-day moving average, currently 2,938. Monday’s close (2,938.8) matched the inflection point, and selling pressure has surfaced early Tuesday.
Similarly, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.36% has struggled to sustain a rally atop notable resistance.
Here again, the index has reversed back under its 50-day moving average, currently 26,470, early Tuesday.
Slightly more broadly, recall that the Dow rallied last week from a successful test of the 200-day moving average.
Meanwhile, the Nasdaq Composite’s /zigman2/quotes/210598365/realtime COMP +0.52% backdrop is equally jagged.
Its corresponding rally attempt has stalled near the 8,000 mark, an area matching the 50-day moving average, currently 7,992.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq’s six-month backdrop remains the weakest of the big three U.S. benchmarks.
This was the first index to break back to the former August range, and it subsequently failed a retest of the breakdown point (8,059) from underneath. The Nasdaq’s intermediate-term bias remains bearish pending a rally atop this area.
Separately, the Nasdaq successfully retested its 200-day moving average at the October low, preserving a bullish longer-term bias.
Looking elsewhere, the Dow Jones Industrial Average is off to a comparably volatile October start.
To reiterate, the index has struggled to sustain a rally atop the 50-day moving average, currently 26,470.
Delving deeper, recall that an intermediate-term inflection point matches the August range top (26,427) and the bottom of the October gap (26,438).
Here again, the Dow maintained its 200-day moving average at the October low, preserving a bullish longer-term bias.
Not surprisingly, the S&P 500 has registered an equally jagged fourth-quarter start.
Tactically, an intermediate-term inflection point matches the August range top (2,943), and the 50-day moving average, currently 2,938, levels also detailed on the hourly chart.
More broadly, consider that the S&P 500 has alternated ranges across four straight months — July, August, September and October.
The bigger picture
As detailed above, the major U.S. benchmarks continue to whipsaw amid a prolonged early-October volatility spike.
Against this backdrop, technical damage has been inflicted, and the bigger-picture backdrop is not one-size-fits-all.
On a headline basis, the Nasdaq Composite has asserted a bearish intermediate-term bias, while the Dow industrials and S&P 500 have vacillated near key inflection points — the S&P 2,940, and Dow 26,430 areas.
Moving to the small-caps, the iShares Russell 2000 ETF has maintained its range bottom.
Still, the subsequent rally attempt has been flat, fueled by decreased volume, and the small-cap benchmark remains capped by its major moving averages. Bearish price action.