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April 9, 2019, 12:28 p.m. EDT

Charting the S&P 500’s approach of the 2,900 mark

Focus: Crude oil confirms uptrend, Energy sector’s breakout attempt, Financials challenge 200-day average, USO, XLE, XLF, VZ, MLCO, MXIM

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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.

The U.S. benchmarks’ bigger-picture technicals remain comfortably bullish in the wake of a strong April start.

Against this backdrop, the S&P 500 is traversing a less-charted patch near six-month highs, rising within striking distance of the 2,900 mark, as well as its slightly more distant record close (2,930.75).

Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX -0.67%  hourly chart highlights the past two weeks.

As illustrated, the S&P has sustained a break to six-month highs. The April selling pressure remains muted.

Tactically, former resistance pivots to support (2,873) and is closely followed by the March peak (2,860).

Looking elsewhere, the Dow Jones Industrial Average has pulled in modestly from the range top.

Recall that support spans from 26,241 to 26,277, levels matching the February and November peaks. The breakout point (26,282) registered nominally higher.

Delving deeper, the former range top (26,109) is closely followed by the top of the April gap (26,071).

True to recent form, the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -1.46%  remains the strongest major benchmark.

As illustrated, the index has maintained its breakout point (7,850) rising to tag a nominal six-month high.

Also consider that Monday’s close (7,953) matched a projected target from the March low, detailed previously.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has confirmed its uptrend, knifing to six-month highs.

Moreover, its initial pullback has been underpinned by the breakout point (7,850), an area better illustrated on the hourly chart. Bullish price action.

On further strength, the Nasdaq’s record close (8,109) and absolute record peak (8,133) remain within striking distance.

Looking elsewhere, the Dow Jones Industrial Average has broken out less decisively.

Still, the April upturn resolves a bullish V-shaped reversal from the December low. (See the S&P’s corresponding rally atop 2,817.) The breakout opens the path to less-charted territory, and potentially material longer-term follow-through.

Tactically, recall that the breakout point matches the February and November peaks — the 26,241-to-26,277 area. Delving deeper, the top of the April gap is followed by the December peak (25,980).

Meanwhile, the S&P 500 has reached less-charted territory, and selling pressure remains flat. In fact, the index is vying Tuesday for its first nine-session winning streak in 15 years.

Recall that the April breakout has dovetailed with a golden cross, or bullish 50-day/200-day moving average crossover.

The bigger picture

Collectively, the major U.S. benchmarks are off to a strong second-quarter start.

On a headline basis, the S&P 500 and Nasdaq Composite have knifed to six-month highs, confirming their respective uptrends. Meanwhile, the Dow industrials’ breakout has registered as less decisive, though its backdrop remains comfortably bullish amid strength elsewhere.

Moving to the small-caps, the iShares Russell 2000 ETF continues to lag behind.

Nonetheless, the small-cap benchmark has reclaimed its 200-day moving average, currently 156.42, notching consecutive closes fractionally higher. This had been the only widely-tracked U.S. benchmark still capped by the 200-day.

On further strength, the range top marks major resistance, an area spanning from 158.78 to 159.50.

Meanwhile, the SPDR S&P MidCap 400 remains incrementally stronger than the Russell 2000.

As illustrated, the mid-cap benchmark has tagged nearly six-month highs, its best level since Oct. 10. An extended test of the range top (354.70) remains underway.

More broadly, recall that the small- and mid-cap benchmarks are rising from sizeable inverse head-and-shoulders patterns defined by the October, December and March lows.

/zigman2/quotes/210599714/realtime
US : S&P US
2,840.23
-19.30 -0.67%
Volume: 1.90B
May 20, 2019 4:51p
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/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
7,702.38
-113.91 -1.46%
Volume: 1.88M
May 20, 2019 5:16p
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