By Michael Ashbaugh, MarketWatch
Broadly speaking, the major U.S. benchmarks are acting well technically, though the March price action remains uneven.
Amid the cross currents, the S&P 500 and Dow industrials have staged tandem breakouts — tagging all-time highs — while the Nasdaq Composite has sustained a break to firmer technical ground, though it remains far from record territory.
Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX +0.58% hourly chart highlights the past two weeks.
As illustrated, the S&P has cleared its range top, rising to record highs.
The breakout punctuates a flag-like pattern, underpinned by near-term support (3,915).
More broadly, the prevailing upturn punctuates a V-shaped reversal from major support (3,723). The March low (3,723.3) has matched last-ditch support, detailed previously.
Meanwhile, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.95% has extended a break to record territory.
In fact, the index has tagged an intraday record high across six straight sessions.
Tactically, near-term floors are not well-defined, as illustrated on the daily chart. Headline support points match the Feb. peak (32,009) and the deeper breakout point (31,650).
Perhaps not surprisingly, the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.69% continues to lag behind.
Nonetheless, the index has extended its rally attempt, reclaiming the 50-day moving average, currently 13,394.
A retest of the former range top (13,607) is underway early Tuesday.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has extended its bullish reversal from major support. Recall the March closing low (12,609) closely matched major support (12,607), detailed previously.
Perhaps more importantly, the index has extended its rally atop the breakdown point, a level matching the 2020 peak (12,973).
Moreover, the rally atop the breakdown point (12,973) encompassed two 7-to-1 up days — across a three-session window — neutralizing the early-March downdraft. (In this context, an “up day” means advancing volume surpassed declining volume by a 7-to-1 margin.)
Tactically, more distant overhead matches the former range top (13,607) and the February breakdown point (13,729).
Looking elsewhere, the Dow Jones Industrial Average continues to take flight.
The prevailing upturn marks a bullish two standard deviation breakout, encompassing four straight closes atop the 20-day Bollinger bands.
As always, consecutive closes atop the volatility bands are statistically unusual, and signal a tension between time horizons.
Specifically, the index is near-term extended, and due to consolidate, following an aggressive break outside the range of its “normal” trailing 20-day volatility.
But more importantly, bullish momentum has registered as extreme, likely laying the groundwork for longer-term upside follow-through. (See the Dow’s early-January break atop the bands, subsequent sideways price action, and March follow-through.)
Recall the prevailing upturn punctuates a successful test of the 50-day moving average at the March low.
Meanwhile, the S&P 500 has registered record highs amid a less decisive breakout.
Still, the rally to previously uncharted territory is straightforwardly bullish.
The bigger picture
As detailed above, the major U.S. benchmarks are acting well technically, though the March price action remains uneven.
On a headline basis, the Dow Jones Industrial Average has knifed to record territory — amid a massive two standard deviation breakout — while the S&P 500 has tagged all-time highs less decisively.
Meanwhile, the Nasdaq Composite continues to lag behind, though the index has reclaimed its 50-day moving average.
Collectively, each big three U.S. benchmark’s intermediate-term bias remains bullish.
Moving to the small-caps, the iShares Russell 2000 ETF /zigman2/quotes/209961116/composite IWM +1.41% has extended a break to record territory, rising amid decreased volume.
To reiterate, the breakout point, circa 230.30, pivots to support.