By Michael Ashbaugh, MarketWatch
Broadly speaking, the major U.S. benchmarks are acting well technically despite persistently uneven price action in spots.
Against this backdrop, the S&P 500 has knifed from its 50-day moving average — registering its biggest daily gain since June — to punctuate a second consecutive late-month retest. The charts below add color:
Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX -1.30% hourly chart highlights the past two weeks.
As illustrated, the S&P has rallied respectably from the 50-day moving average.
Recall that consecutive monthly closes — January and February — have registered within two points of the 50-day moving average amid successful retests.
Conversely, additional overhead matches the range top (3,930), an area that capped last week’s price action.
Meanwhile, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.77% has whipsawed of late near recent record highs.
Put differently, the index has tried to break from its range — in both directions — ultimately concluding with a bull-bear stalemate.
(The Dow initially broke 356 points above the range, then 361 points under the range.)
Against this backdrop, the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -1.96% remains the weakest major benchmark.
Nonetheless, the index has maintained major support matching the 2020 peak (12,973), an area also illustrated below.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has rallied from last-ditch support matching the 2020 peak (12,973), detailed repeatedly.
Last week’s low (13,003) registered slightly above support to punctuate the second straight late-month retest. (The late-January low (12,985) also registered just above support.)
The prevailing rally from support places the Nasdaq back atop its 50-day moving average, currently 13,335.
On further strength, the breakdown point (13,730) marks notable resistance. The pending retest from underneath should be a useful bull-bear gauge.
Looking elsewhere, the Dow Jones Industrial Average remains the strongest major benchmark.
Still, the index has registered a swift 1,000-point whipsaw from last week’s record high.
Recall the Dow has tried to break above, and below, the mid-February range, thus far concluding with a bull-bear stalemate. Range-bound price action is bullish against the prevailing backdrop.
Meanwhile, the S&P 500 has rallied aggressively from its 50-day moving average to punctuate the second straight late-month retest.
To reiterate, the sharp reversal marked the S&P’s biggest single-day gain since June.
The bigger picture
Collectively, the major U.S. benchmarks are acting well technically, on balance, though the recent price action remains uneven.
On a headline basis, the S&P 500 and Nasdaq Composite have maintained major support, rising from a second straight successful retest. (See the daily charts.)
Each big three benchmark’s intermediate-term bias remains bullish.
Moving to the small-caps, the iShares Russell 2000 ETF /zigman2/quotes/209961116/composite IWM -1.39% has sustained a February break to record highs.
The prevailing upturn punctuates a successful test of the breakout point (216.70).
Similarly, the SPDR S&P MidCap 400 ETF /zigman2/quotes/201764887/composite MDY -1.11% has sustained its break to a higher plateau.
Here again, the MDY has asserted an orderly range, underpinned by the breakout point.