By Michael Ashbaugh, MarketWatch
Technically speaking, the U.S. benchmarks’ bigger-picture backdrop remains bullish, on balance, though the prevailing market technicals are not one-size-fits-all.
Amid the cross currents, the S&P 500 has sustained a bullish reversal from major support, rising to challenge record highs, and within striking distance of the marquee 4,000 mark.
Before detailing the U.S. markets’ wider view, the S&P 500’s /zigman2/quotes/210599714/realtime SPX +1.86% hourly chart highlights the past two weeks.
As illustrated, the S&P has rallied to the range top, rising to challenge record highs.
The prevailing upturn punctuates last week’s retest of the 50-day moving average.
More immediately, the Feb. peak (3,950) remains an inflection point, and is followed by the 3,915 support.
Similarly, the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.98% has extended its rally attempt, rising to challenge record territory.
Here again, the prevailing upturn punctuates a bullish reversal from two-week lows.
Tactically, near-term inflection points in the 32,500 and 32,800 areas remain in play.
Perhaps not surprisingly, the Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +1.59% remains the weakest major benchmark.
As illustrated, the index is not challenging record highs.
Instead, the index is vying to simply maintain major support matching the 2020 peak (12,973), an area also illustrated below. A potentially consequential retest remains underway.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has registered an extended test of major support (12,973).
The specific area matches the 2020 peak (12,973) a level that also marked the early-March breakdown point. (Recall the initial violation of the 2020 peak punctuated a head-and-shoulders top, a bearish pattern that was subsequently neutralized by the swift reversal back to the range, fueled by two 7-to-1 up days.)
Tactically, a sustained violation of support would signal a bearish intermediate-term bias.
Delving deeper, significant support (12,607) closely matches the March closing low (12,609). (See for instance, the Jan. 11 review.)
Looking elsewhere, the Dow Jones Industrial Average remains the strongest major benchmark.
Recall that last week’s low (32,071) registered above the breakout point (32,009) to punctuate a successful retest.
The Dow has subsequently knifed from support, notching consecutive record closes.
More broadly, the index has registered directionally sharp March rallies, and a comparably flattish intervening pullback. Bullish momentum is intact.
Meanwhile, the S&P 500 has staged a bullish reversal from its 50-day moving average.
The prevailing upturn places the marquee 4,000 mark within striking distance.
The bigger picture
Broadly speaking, the prevailing backdrop is largely bullish, though it is not one-size-fits-all.
On a headline basis, the S&P 500 and Dow industrials continue to press record territory.
Meanwhile, the Nasdaq Composite remains far from record highs, as it vies to simply maintain major support (12,973). A potentially consequential retest of this area remains underway.
Moving to the small-caps, the iShares Russell 2000 ETF /zigman2/quotes/209961116/composite IWM +1.21% has thus far weathered a respectable pullback from recent record highs.
Still, the small-cap benchmark has asserted a posture under its 50-day moving average (220.65) and the former range bottom (216.70).
Deeper inflection points match the March closing low (213.19) and absolute March low (207.21). An eventual violation would mark a “lower low” — and punctuate a modified double top — raising an intermediate-term caution flag.