By Lawrence G. McMillan
The broad stock market continues to be led by Nasdaq. Both the Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -0.82% and the NASDAQ-100 /zigman2/quotes/210598364/realtime NDX -0.87% /zigman2/quotes/208575548/composite QQQ -0.84% have repeatedly made new all-time highs: seven times in the last eight trading days. This action has “dragged” the S&P 500 along to new all-time highs as well.
The good news is that Nasdaq is leading the way, but the bad news is that breadth has been poor on this rally – and that often leads to trouble down the road.
Regardless, the S&P /zigman2/quotes/210599714/realtime SPX -0.11% should have support in the 4238-4257 area, where it did some “work” before breaking out above 4260 on June 24. Below that, there is support at 4167 (doubly tested in June) and 4060 (doubly tested in May). It would not be constructive to see SPX pull back below its most recent breakout point (4260), but even if it did, its chart would remain positive as long as those other support levels are in place.