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Michael Ashbaugh

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April 17, 2018, 12:48 p.m. EDT

Charting a bullish technical tilt, S&P 500 rattles cage on major resistance

Focus: Transports show signs of life, Intel threatens 17-year breakout, IYT, FDX, INTC, CAT, FIVE, PCRX

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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’ jagged April rally attempt has reached potentially consequential tests.

On a headline basis, the S&P 500 is challenging major resistance — S&P 2,695, matching the 2017 peak — and a sustained break higher would strengthen the bull case.

Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX +0.22%  hourly chart highlights the past two weeks.

As illustrated, the S&P continues to challenge significant overhead.

The familiar area broadly spans from 2,673 to 2,695, levels matching the 2017 close and 2017 peak.

Separately, the 50-day moving average, currently 2,686, rests within the resistance band. The S&P has not closed atop the 50-day since March 16, just over one month ago.

Similarly, the Dow Jones Industrial Average is pressing notable overhead.

In its case, the 50-day moving average, currently 24,607, is followed by an inflection point matching the 2017 close (24,719).

This area broadly matches trendline resistance, illustrated on the daily chart.

Perhaps not surprisingly, the Nasdaq Composite is also challenging its range top.

Here again, the specific area closely matches the 50-day moving average, currently 7,192.

As always, the 50-day is a widely-tracked intermediate-term trending indicator, and it has marked an inflection point, better illustrated below.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has extended its jagged April rally attempt, notching three straight closes atop the breakdown point (7,085).

To reiterate, the descending 50-day moving average, currently 7,192, is under siege. The Nasdaq has not closed atop the 50-day since March 21.

More distant overhead (7,255) matches the post-breakdown peak and the bottom of the March gap (7,303).

Looking elsewhere, the Dow Jones Industrial Average has reached a headline technical test.

Recall three inflection points, detailed previously:

  • The 50-day moving average, currently 24,607.

  • Resistance matching the 2017 close of 24,719.

  • Resistance matching the 2017 peak of 24,876.

These areas generally match trendline resistance pinned to the January peak.

Consider that the Dow has not closed atop the 50-day moving average since March 9, and has not registered consecutive closes higher since February. A sustained break atop the 50-day would strengthen the bull case.

Meanwhile, the S&P 500 is challenging familiar overhead broadly spanning from 2,673 to 2,695.

To reiterate, the 50-day moving average, currently 2,686, matches resistance. The S&P has struggled to sustain a posture higher following the February breakdown.

The bigger picture

Broadly speaking, the U.S. benchmarks’ jagged April rally attempt has reached potentially consequential technical tests.

On a headline basis, each big three benchmark is pressing the 50-day moving average, venturing higher for the first time this month.

And as it applies to the S&P 500 and Dow industrials, the 50-day moving average closely matches major resistance.

Moving to the small-caps, the iShares Russell 2000 ETF has extended its April upturn, reaching familiar overhead.

Consider that Monday’s close (155.37) effectively matched the 2017 peak (155.41). The small-cap benchmark has ventured firmly higher early Tuesday.

Meanwhile, the S&P MidCap 400’s backdrop remains incrementally softer.

Still, the MDY has edged atop the 50-day moving average, currently 342.90, rising within view of resistance matching the 2017 peak (349.16).

Against this backdrop, the SPDR Trust S&P 500 has reached a key technical test.

/zigman2/quotes/210599714/realtime
US : S&P US
4,529.70
+10.07 +0.22%
Volume: 1.01B
Oct. 20, 2021 1:26p
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