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 major U.S. benchmarks continue to grind higher amid a bullish second-quarter start.
In the process, the S&P 500 has reached less-charted territory at six-month highs, rising within striking distance of its record close (2,930.75). The pending retest from underneath will likely add color.
Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX -0.65% hourly chart highlights the past two weeks.
As illustrated, the S&P has sustained a break to six-month highs. Monday’s session low (2,896) matched the breakout point punctuating a successful retest.
Conversely, last week’s high (2,910.5) registered slightly under the S&P’s 2,912 target, detailed repeatedly.
Meanwhile, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.42% is traversing a jagged near-term range.
Still, the index has spiked from its range bottom, gapping atop major resistance. The specific area matches a six-month range top — spanning from 26,241 to 26,282 — better illustrated on the daily chart.
On further strength, the April closing peak (26,425) is closely followed by the absolute April peak (26,487).
True to recent form, the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -0.46% remains the strongest major benchmark.
The index has tagged six month highs across four straight sessions amid still muted April selling pressure.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq is digesting its latest break to six-month highs. The April bull flag is a continuation pattern, improving the chances of incremental upside.
From current levels, the 8,000 mark is followed by the Nasdaq’s record close (8,109) and absolute record peak (8,133).
Looking elsewhere, the Dow Jones Industrial Average has reclaimed major resistance matching the February and November peaks — the 26,240-to-26,280 area.
On further strength, more distant inflection points match the January 2018 peak (26,616) and September peak (26,769).
More broadly, the Dow continues to lag slightly behind — it remains capped by the early-April peak — though this six-month backdrop supports a comfortably bullish bias.
Meanwhile, the S&P 500 has staged a bull-flag breakout, clearing the 2,900 mark.
The upturn originates from major support (2,873) a level matching last week’s low (2,873.3). Bullish price action.
The bigger picture
As detailed above, the major U.S. benchmarks are acting well technically. Broadly speaking, each benchmark’s near- to intermediate-term bias remains comfortably bullish.
Moving to the small-caps, the iShares Russell 2000 ETF continues to lag slightly behind.
Still, the small-cap benchmark’s grinding-higher April rally has placed the range top within striking distance. To reiterate, resistance broadly spans from about 158.80 to 159.50.
Meanwhile, the SPDR S&P MidCap 400 has broken out, reaching less-charted territory at six-month highs.
Tactically, the breakout point, circa 355, pivots to support. Conversely, recall that a projected target from the March low closely matches the MDY’s all-time high (374.10).
More broadly, the small- and mid-caps are rising from inverse head-and-shoulders patterns defined by the October, December and March lows. The mid-cap benchmark has resolved its pattern, while the Russell 2000’s remains in progress.