By Michael Ashbaugh, MarketWatch
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Technically speaking, the major U.S. benchmarks continue to whipsaw amid a pronounced August volatility spike.
Against this backdrop, the S&P 500 has extended its rally from major support (2,817) — preserving a bullish longer-term bias — also rising within striking distance of its third recent retest of the 50-day moving average.
Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX -3.37% hourly chart highlights the past two weeks.
As illustrated, the S&P has rallied from the range bottom, an area roughly matching major support (2,817).
Tactically, the 2,912 inflection point has matched the top of Monday’s gap (2,913). On further strength, the mid-August range top (2,943) closely matches the 50-day moving average, currently 2,946.
Meanwhile, the Dow Jones Industrial Average has extended its rally from two-month lows.
The prevailing upturn punctuates a shaky retest of the 200-day moving average. The Dow registered consecutive closes last week slightly under the trending indicator.
More immediately, near-term resistance (26,250) is followed by the range top, the 26,413-to-26,427 area.
Perhaps not surprisingly, the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -3.79% is traversing an equally jagged backdrop.
Still, the index has strengthened slightly versus the other benchmarks, rising more firmly within striking distance of the 50-day moving average. This area roughly matches the range top, also illustrated below.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has spiked from the August range bottom.
Tactically, notable overhead broadly spans from 8,045 to 8,059, levels matching the 50-day moving average and the July gap. Recall that the mid-August peak (8,065) has closely matched gap resistance.
Looking elsewhere, the Dow Jones Industrial Average has spiked from two-month lows.
To reiterate, the prevailing upturn punctuates a jagged retest of the 200-day moving average, including consecutive closes last week slightly under the trending indicator.
Within the August range, the 26,250 area remains an inflection point, and is followed by the range top, circa 26,413, also detailed on the hourly chart.
Meanwhile, the S&P 500 is also traversing a jagged three-week range.
The August downdraft thus far been underpinned by major support (2,817). Recall that the August low (2,822) registered slightly higher.
Conversely, the mid-August range top (2,943) closely matches the 50-day moving average, currently 2,946.
The bigger picture
Collectively, the major U.S. benchmarks continue to whipsaw amid jagged August price action.
Against this backdrop, the S&P 500 has maintained major support (2,817), the Nasdaq Composite bottomed last week comfortably above major support (7,670), and the Dow industrials briefly undercut the marquee 200-day moving average.
As it applies to the S&P 500, the prevailing upturn punctuates a successful retest of support, and the index has followed through higher to start this week.
Moving to the small-caps, the iShares Russell 2000 ETF has narrowly maintained its range bottom.
Recall that last week’s closing low (145.49) registered fractionally atop the mid-year low (145.32).
The prevailing upturn places the 200-day moving average, currently 151.08, just overhead. A retest from underneath remains underway.
Meanwhile, the SPDR S&P MidCap 400 has whipsawed at its 200-day moving average, currently 341.20.
More broadly, the MDY has bottomed above the May low, against a still range-bound mid-year backdrop. (See the flatlining 50- and 200-day moving averages, consistent with a trendless backdrop.)