By Michael Ashbaugh, MarketWatch
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Technically speaking, the major U.S. benchmarks are concluding July on a bullish note, digesting potentially consequential early-month breakouts.
Against this backdrop, the S&P 500 has registered three July rallies to record territory — in grinding-higher form — and its prolonged slow-motion breakout attempt remains in play.
Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX +0.0020% hourly chart highlights the past two weeks.
As illustrated, the S&P is digesting a jagged July break to record territory.
Tactically, the breakout point (3,017) remains an inflection point. Delving deeper, notable support matches the prevailing range bottom (2,973).
Meanwhile, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.19% remains range-bound.
To reiterate, well-defined support closely matches the bottom of the July gap (27,088). This area underpins a bullish flag-like pattern, illustrated on the daily chart.
Against this backdrop, the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.07% has whipsawed of late near record territory.
Tactically, the 8,264 area remains a near-term inflection point. Delving deeper, major support matches the early-July breakout point (8,172), an area also illustrated below.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has rallied to challenge record territory, rising from a jagged retest of major support (8,176).
More broadly, the prevailing rally from the June low continues to be punctuated by shallow, and relatively short-lived, pullbacks. Bullish price action.
Looking elsewhere, the Dow Jones Industrial Average is not pressing new highs.
Still, the Dow’s record close (27,359.16) and absolute record peak (27,398.68) remain within striking distance.
Slightly more broadly, recall that the mid-July spike registered as an unusually bullish two standard deviation breakout, the most decisive of the widely-tracked U.S. benchmarks. The subsequent bull flag is a continuation pattern, underpinned by gap support (27,088). Bullish price action.
Meanwhile, the S&P 500 is pressing record territory atop the 3,000 mark.
The prevailing upturn punctuates a successful test of the 20-day moving average, currently 2,998, as well as near-term support (2,973).
The bigger picture
Collectively, the bigger-picture backdrop remains comfortably bullish ahead of the Federal Reserve’s policy statement, due out mid-week.
On a headline basis, the S&P 500 and Nasdaq Composite registered nominal record highs last week — in grinding-higher form — while the Dow industrials remain range-bound, digesting a decisive mid-July breakout.
Moving to the small-caps, the iShares Russell 2000 ETF remains range-bound.
Still, the small-cap benchmark has recently rallied toward the range top amid increased volume. Tactically, the July peak (158.03) is followed by firmer overhead matching the former rang top (159.50).
Meanwhile, the SPDR S&P MidCap 400 has nailed its range top.
Recall that the MDY twice tagged a year-to-date peak (361.69) last week, a level precisely matching the Wednesday and Friday session highs.
Monday’s session high (361.52) closely matched resistance — as well as the April peak (361.52) — and an extended breakout attempt remains underway. A near-term target projects to the 367 area on follow-through.