Technically speaking, the major U.S. benchmarks continue to trend higher amid thus far lackluster 2019 selling pressure.
Against this backdrop, the S&P 500 is back early Tuesday for its second crack at the 200-day moving average, an area defining the headline bull-bear battleground.
Before detailing the U.S. markets’ wider view, the S&P 500’s
hourly chart highlights the past two weeks.
As illustrated, the S&P has pulled in from major resistance (2,742) to an inflection point at 2,710.
Monday’s close (2,709.8) matched resistance, and the S&P is comfortably higher early Tuesday. To reiterate, major overhead matches the May peak (2,742) and the 200-day moving average, currently 2,743.
Similarly, the Dow Jones Industrial Average has pulled in amid technical price action.
Recall that last week’s low (24,883) registered slightly above major support matching the 2017 peak (24,876).
Conversely, Monday’s session high (25,196.75) closely matched near-term resistance (25,193).
Slightly more broadly, the Dow has registered nine straight closes atop the 200-day moving average, currently 25,014. Constructive price action.
Against this backdrop, the Nasdaq Composite
has also pulled in to its range.
Tactically, gap resistance (7,347) is followed by firmer overhead matching the February peak (7,410).
Here again, Tuesday’s early session high (7,410) has matched resistance and retest remains underway.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has staged an orderly pullback from two-month highs, topping under the 200-day moving average, currently 7,460.
The index has thus far maintained the 7,274 support on a closing basis.
Separately, recall that the 50-day moving average (in blue) has ticked higher, consistent with an intermediate-term trend shift. (This signal obviously lags the initial trendline breakout.)
Looking elsewhere, the Dow Jones Industrial Average is also digesting a recent trendline breakout.
The index has thus far topped near the June peak (25,402), an area also illustrated on the hourly chart.
Conversely, recall that last week’s low (24,883) closely matched the 2017 peak (24,876) punctuating a successful retest. Price action within the prevailing range supports a bullish intermediate-term bias.
Meanwhile, the S&P 500 has more or less nailed major resistance (2,742) topping last week within three points.
The subsequent downturn has thus far inflicted limited damage. Recall that last week’s close (2,708) closely matched the 2,710 inflection point, also illustrated on the hourly chart.
The bigger picture
As detailed above, the big three U.S. benchmarks continue to act well technically. The February downturn from two-month highs has been relatively orderly, inflicting limited damage.
More immediately, the major benchmarks are pressing significant resistance early Tuesday, including Nasdaq 7,410 and the S&P 2,742 area.
Moving to the small-caps, the iShares Russell 2000 ETF has also staged an orderly pullback.
Tactically, the February peak (151.60) marks an overhead inflection point, and the small-cap benchmark has ventured higher early Tuesday. On further strength, additional overhead spans from about 153.60 to 154.50.
Similarly, the SPDR S&P MidCap 400 is digesting a recent breakout.
Here again, the February peak (340.04) marks an inflection point, and the mid-cap benchmark has ventured higher early Tuesday. A close firmly atop resistance would confirm the intermediate-term uptrend.
Looking elsewhere, the SPDR Trust S&P 500
has reached its second test of major resistance. Consider two inflection points, detailed repeatedly:
- Resistance matching the May peak of 274.25.
- The 200-day moving average, currently 274.07.
Tuesday’s early session high (273.96) has registered fractionally under the 200-day moving average, and the retest remains underway.
Against this backdrop, the S&P 500 is also back for a second crack at major resistance. Two familiar hurdles stand out:
- Major resistance matching the May peak of 2,742.24.
- The 200-day moving average, currently 2,743.34.
Last week’s high (2,739) registered nominally under this area, and the S&P has topped early Tuesday at 2,741.
As always, it’s the response to resistance that matters. The chances of follow-through improve to the extent the S&P holds tightly to the range top.
On further strength, gap resistance spans from 2,760 to 2,773, and is followed by firmer overhead matching the March peak (2,802).
Beyond technical levels, the S&P 500 seems to have absorbed the second notable 2019 downturn. Its intermediate-term market bias remains comfortably bullish pending more aggressive (damaging) selling pressure.
Tactically, the S&P’s prevailing retest of the 200-day moving average, potentially across the next several sessions, will likely add color.
Tuesday’s Watch List
The charts below detail names that are technically well positioned. These are radar screen names — sectors or stocks poised to move in the near term. For the original comments on the stocks below, see The Technical Indicator Library.
Drilling down further, the iShares China Large-Cap ETF
has come to life as China-U.S. trade negotiations commence this week.
Specifically, the shares have recently rallied atop trendline resistance, rising to challenge the 200-day moving average, currently 42.54.
Monday’s close (42.54) matched the 200-day — a widely-tracked longer-term trending indicator — and the retest remains underway.
On further strength, notable overhead matches the December peak (43.06). A sustained break higher would resolve a double bottom — defined by the October and January lows — opening the path to potentially material follow-through.
(Note that China’s retest dovetails with the S&P 500’s corresponding test of the 200-day moving average.)
Initially profiled Dec. 10, the VanEck Vectors Gold Miners ETF
has returned 9.3% and remains well positioned.
Late last month, the group gapped atop the 200-day moving average, knifing to seven-month highs.
The subsequent pullback has been comparably flat, placing the group at an attractive entry 2.8% under the January peak. Tactically, near-term support (21.95) is followed by the deeper breakout point (21.50).
More broadly, notice the recent golden cross — or bullish 50-day/200-day moving average crossover — signaling that the intermediate-term uptrend has overtaken the longer-term trend.
Moving to specific names, 3M Co.
is a Dow 30 component showing signs of life. (Yield =2.9%.)
As illustrated, the shares have edged atop trendline resistance, rising to challenge the 200-day moving average, currently 200.70. This area is closely followed by a two-month range top, circa 203.10.
Underlying the upturn, 3M’s relative strength index (not illustrated) has registered nearly three-month highs, improving the chances of eventual follow-through. Tactically, the trendline pivots to support, circa 197, and a breakout attempt is in play barring a violation.
is a large-cap provider of technology and consulting services positioned to rise. (Yield =3.0%.)
The shares initially spiked four weeks ago, gapping sharply higher after the company’s third-quarter results.
More immediately, the shares have established a tight February range, digesting a break to 18-year highs. The flag-like pattern positions the shares to build on the steep January rally.
Tactically, initial support matches the breakout point (10.68) and is followed by the former range bottom (10.40). A posture higher supports a bullish bias.
Finally, Splunk, Inc.
is a well positioned large-cap software vendor.
Technically, the shares have edged to record territory, clearing resistance matching the August peak. Meanwhile, the relative strength index (not illustrated) has notched five-month highs, improving the chances of more decisive follow-through.
Tactically, the former range top (130.00) is followed by a deeper floor, circa 126.50, and a breakout attempt is in play barring a violation.
Still well positioned
The table below includes names recently profiled in The Technical Indicator that remain well positioned. For the original comments, see The Technical Indicator Library.
|Zendesk, Inc.||ZEN||Feb. 11|
|Fortive Corp.||FTV||Feb. 11|
|Mastercard, Inc.||MA||Feb. 11|
|Procter & Gamble Co.||PG||Feb. 8|
|Boston Scientific Corp.||BSX||Feb. 8|
|Deckers Outdoor Corp.||DECK||Feb. 8|
|Alphabet, Inc.||GOOGL||Feb. 6|
|LogMeIn, Inc.||LOGM||Feb. 6|
|Norfolk Southern Corp.||NSC||Feb. 6|
|Packaging Corp. of America||PKG||Feb. 6|
|Akamai Technologies, Inc.||AKAM||Feb. 5|
|Global Payments, Inc.||GPN||Feb. 5|
|Alibaba Group Holding Ltd.||BABA||Feb. 5|
|Baidu, Inc.||BIDU||Feb. 4|
|Ebay, Inc.||EBAY||Feb. 4|
|Visa, Inc.||V||Feb. 4|
|Adobe, Inc.||ADBE||Feb. 1|
|Baozun, Inc.||BZUN||Feb. 1|
|Intercept Pharmaceuticals, Inc.||ICPT||Feb. 1|
|Owens Corning||OC||Feb. 1|
|ON Semiconductor Corp||ON||Jan. 31|
|MKS Instruments, Inc.||MKSI||Jan. 31|
|iRobot Corp.||IRBT||Jan. 31|
|Salesforce.com, Inc.||CRM||Jan. 30|
|KLA-Tencor Corp.||KLAC||Jan. 30|
|Western Digital Corp.||WDC||Jan. 30|
|Whirlpool Corp.||WHR||Jan. 30|
|SPDR S&P Homebuilders ETF||XHB||Jan. 30|
|Texas Instruments, Inc.||TXN||Jan. 29|
|Keysight Technologies, Inc.||KEYS||Jan. 29|
|Check Point Software Technologies||CHKP||Jan. 29|
|Exact Sciences Corp.||EXAS||Jan. 28|
|Schlumberger Limited||SLB||Jan. 28|
|Aptiv plc||APTV||Jan. 28|
|Teradyne, Inc.||TER||Jan. 28|
|VanEck Vectors Semiconductor ETF||SMH||Jan. 25|
|Applied Materials, Inc.||AMAT||Jan. 25|
|Micron Technology, Inc.||MU||Jan. 25|
|Roku, Inc.||ROKU||Jan. 25|
|iShares MSCI Emerging Markets ETF||EEM||Jan. 24|
|SBA Communications Corp.||SBAC||Jan. 24|
|Eastman Chemical Co.||EMN||Jan. 24|
|LGI Homes, Inc.||LGIH||Jan. 24|
|Paycom Software, Inc.||PAYC||Jan. 23|
|Delphi Technologies||DLPH||Jan. 23|
|Bed Bath & Beyond, Inc.||BBBY||Jan. 23|
|Eagle Materials, Inc.||EXP||Jan. 23|
|Advanced Micro Devices, Inc.||AMD||Jan. 22|
|Lennar Corp.||LEN||Jan. 22|
|Materials Select Sector SPDR||XLB||Jan. 18|
|Nike, Inc.||NKE||Jan. 18|
|VeriSign, Inc.||VRSN||Jan. 18|
|Dollar Tree, Inc.||DLTR||Jan. 18|
|Apple, Inc.||AAPL||Jan. 18|
|Nevro Corp.||NVRO||Jan. 17|
|Westlake Chemical Corp.||WLK||Jan. 17|
|Coupa Software, Inc.||COUP||Jan. 16|
|Veeva Systems, Inc.||VEEV||Jan. 16|
|Teledoc Health, Inc.||TDOC||Jan. 16|
|Incyte Corp||INCY||Jan. 16|
|Deere & Co.||DE||Jan. 11|
|CyberArk Software||CYBR||Jan. 11|
|Square, Inc.||SQ||Jan. 10|
|Facebook, Inc.||FB||Jan. 9|
|Okta, Inc.||OKTA||Jan. 9|
|Tandem Diabetes Care, Inc.||TNDM||Jan. 9|
|RingCentral, Inc||RNG||Jan. 8|
|Alteryx, Inc.||AYX||Jan. 8|
|Pioneer Natural Resources Co.||PXD||Jan. 8|
|Netflix, Inc.||NFLX||Jan. 7|
|iShares Brazil ETF||EWZ||Jan. 7|
|Ciena Corp.||CIEN||Jan. 7|
|Crox, Inc.||CROX||Jan. 7|
|Five9, Inc.||FIVN||Dec. 13|
|Ambarella, Inc.||AMBA||Dec. 11|
|Tech Data Corp.||TECD||Dec. 11|
|SPDR Gold Shares ETF||GLD||Dec. 10|
|VanEck Vectors Gold Miners ETF||GDX||Dec. 10|
|Workday, Inc.||WDAY||Dec. 10|
|Atlassian Corp.||TEAM||Dec. 10|
|Ventas, Inc.||VTR||Nov. 26|
|Ubiquiti Networks, Inc.||UBNT||Nov. 13|
|TripAdvisor, Inc.||TRIP||Nov. 13|
|Welltower, Inc.||WELL||Nov. 12|
|Xilinx, Inc.||XLNX||Nov. 12|
|Acacia Communications, Inc.||ACIA||Nov. 7|
|Starbucks Corp.||SBUX||Nov. 5|
|American Tower Corp.||AMT||Nov. 5|
|Coca-Cola Co.||KO||Oct. 31|
|Utilities Select Sector SPDR||XLU||Oct. 25|
|McDonald’s Corp.||MCD||Oct. 24|
|Spirit Airlines, Inc.||SAVE||Oct. 19|
|Yum! Brands, Inc.||YUM||Oct. 18|
|Eli Lilly & Co.||LLY||Oct. 17|
|Merck & Co., Inc.||MRK||June 21|
|Twilio, Inc.||TWLO||May 21|
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