Bulletin
Investor Alert

New York Markets Open in:

Michael Ashbaugh

The Technical Indicator Archives | Email alerts

June 2, 2020, 12:32 p.m. EDT

S&P 500 sustains key technical breakout amid bullish market rotation

Focus: Financials sustain technical breakout, Utilities clear key trendline, Apple’s stealth breakout attempt, XLF, XLU, AAPL, NTRS, FIVN

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    S&P 500 Index (SPX)
  • X
    Dow Jones Industrial Average (DJIA)
  • X
    NASDAQ Composite Index (COMP)

or Cancel Already have a watchlist? Log In

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 U.S. benchmarks’ bigger-picture backdrop continues to strengthen amid market rotation.

On a headline basis, the S&P 500 has sustained a break atop its 200-day moving average — likely signaling a primary trend shift — while the Nasdaq Composite has belatedly broken out, tagging three-month highs this week.

Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX -0.84%  hourly chart highlights the past two weeks.

As illustrated, the S&P has sustained the late-May breakout.

Tactically, the May peak (3,068.7) registered just under next resistance at the December low (3,070). Tuesday’s early session high (3,072) has also effectively matched resistance.

Conversely, the S&P has sustained a break atop its 200-day moving average, currently 3,004, across four straight sessions.

Similarly, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.47%  is digesting the late-May breakout.

In its case, the May peak (25,758) closely matched the February gap (25,752), detailed previously, an area also illustrated on the daily chart.

Conversely, the 25,000 mark has underpinned the Dow’s initial pullback.

Against this backdrop, the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -1.27%  has belatedly broken out, reaching three-month highs to start June.

The prevailing upturn punctuates a successful test of major support (9,323). Friday’s session low (9,324) matched the inflection point.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has sustained a break to three-month highs, maintaining familiar gap support (9,323).

Moreover, the index has filled the massive February gap this week. Record territory is increasingly within striking distance.

Beyond technical levels, the Nasdaq’s prevailing backdrop supports a bullish near-, intermediate- and longer-term bias.

Looking elsewhere, the Dow Jones Industrial Average diverged last week, breaking decisively atop major resistance.

To reiterate, the May peak (25,758) closely matched resistance at the February gap (25,752). The initial pullback from resistance has been orderly.

More broadly, the upturn marked a two standard deviation breakout, punctuated by a lone close atop the 20-day Bollinger bands. (The Dow narrowly missed consecutive closes atop the bands, a more definitively bullish event.)

Meanwhile, the S&P 500 has sustained a break atop the 200-day moving average, currently 3,004.

Here again, the initial breakout encompassed a single close atop the 20-day Bollinger bands.

Conversely, the S&P has initially balked at next resistance (3,070). Tuesday’s early session high (3,072) has matched resistance and modest selling pressure has resurfaced.

The bigger picture

Collectively, the bigger-picture backdrop continues to strengthen amid rotational market price action.

On a headline basis, the S&P 500 has sustained a break atop its 200-day moving average, while the Nasdaq Composite has rallied from major support (9,323). (See the hourly charts.)

Moving to the small-caps, the iShares Russell 2000 ETF is digesting a decisive late-May breakout.

Last week’s upturn marked an unusual two standard deviation breakout encompassing consecutive closes atop its 20-day volatility bands. Though near-term extended, and due to consolidate, the steep rally is longer-term bullish.

Separately, the subsequent pullback has been underpinned by the breakout point. Constructive price action.

Similarly, the SPDR S&P MidCap 400 ETF has sustained a decisive late-May breakout.

/zigman2/quotes/210599714/realtime
US : S&P US
3,357.01
-28.48 -0.84%
Volume: 2.74B
Sept. 17, 2020 5:14p
loading...
/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,901.98
-130.40 -0.47%
Volume: 439.89M
Sept. 17, 2020 5:14p
loading...
/zigman2/quotes/210598365/realtime
US : U.S.: Nasdaq
10,910.28
-140.19 -1.27%
Volume: 3.30M
Sept. 17, 2020 5:16p
loading...
1 2
This Story has 0 Comments
Be the first to comment
More News In
Markets

Story Conversation

Commenting FAQs »
Link to MarketWatch's Slice.