By Lawrence G. McMillan
The S&P 500 index has managed to slog through the heavy resistance area at 3870-3950 and break out to new all-time highs, both on an intraday and closing basis.
As was the case last week, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.56% continues to outperform the S&P /zigman2/quotes/210599714/realtime SPX +0.08% and is leading the way. Small caps, as represented by the Russell 2000 Index /zigman2/quotes/210598147/delayed RUT +0.14% /zigman2/quotes/209961116/composite IWM +0.14% have started to lag behind over the past few days, though, and the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.59% is lagging well behind, having made its highs in mid-February. Things would look a lot better if the Nasdaq Composite, or at least the NASDAQ-100 /zigman2/quotes/210598364/realtime NDX +0.75% /zigman2/quotes/208575548/composite QQQ +0.62% could join the party.
As it is, there should be support for the S&P in the old resistance area: 3870-3950. A close back below 3870 would be very negative, for it would mean that the recent upside breakout was a false one.