Technically speaking, the U.S. benchmarks have weathered a respectable mid-August market whipsaw, rising from successful tests of well-defined support.
In the process, the S&P 500’s record high (2,872) is firmly within striking distance, while the small- and mid-cap benchmarks have already edged to uncharted territory.
Before detailing the U.S. markets’ wider view, the S&P 500’s SPX, +0.51% hourly chart highlights the past two weeks.
As illustrated, the S&P has extended its rally from major support (2,802).
Additional resistance matches the August peak (2,863) and is closely followed by the S&P’s absolute record peak (2,872.67), established Jan. 26.
Meanwhile, the Dow Jones Industrial Average has rallied more aggressively from support.
To reiterate, the range bottom closely matches key trendline support, illustrated on the daily chart — the 25,150 area. The steep rally from support places the Dow at five-month highs.
Against this backdrop, the Nasdaq Composite’s COMP, +0.89% rally attempt registers as comparably lukewarm.
Still, the index has rallied from major support matching the 50-day moving average — also illustrated below — rising atop near-term trendline resistance.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq twice maintained trendline support last week, and subsequently rallied slightly atop the former breakdown point (7,806).
The trendline closely tracks the 50-day moving average, currently 7,750, and the Nasdaq’s intermediate-term bias remains bullish barring a violation.
Looking elsewhere, the Dow industrials’ backdrop continues to strengthen.
In its case, the index nailed trendline support last week, also briefly tagging the 50-day moving average.
The subsequent steep rally from support places the Dow in less-charted territory at five-month highs. Modest overhead matches the late-February peak (25,800) and is currently under siege.
Meanwhile, the S&P 500 nailed major support last week, bottoming at 2,802.5.
The sharp reversal punctuates a successful retest, placing the August peak (2,863) under siege, and the S&P’s record high (2,872.67) within view.
The bigger pictureAs detailed above, the U.S. benchmarks have weathered a respectable mid-August downdraft fueled by possibly overblown concerns regarding Turkey’s currency crisis.
On a headline basis:
The Nasdaq Composite has maintained trendline support, a level closely tracking the 50-day moving average. The Dow Jones Industrial Average has also rallied from trendline support and the 50-day moving average. The S&P 500 has reversed sharply from the 2,802 breakout point.The successful retests of well-defined support are technically constructive.
Moving to the small-caps, the iShares Russell 2000 ETF IWM, +1.43% may be poised to take flight.
Recall that its record close (169.97) is closely followed by the absolute record peak (170.20).
The small-cap benchmark has cleared both levels early Tuesday — reaching uncharted territory — opening the path to potentially material follow-through.
Meanwhile, the SPDR S&P MidCap 400 has already broken out, though narrowly, notching an all-time closing high.
The breakout resolves a bullish ascending triangle, and punctuates a successful test of trendline support.
Looking elsewhere, the SPDR Trust S&P 500 SPY, +0.51% has rallied from its breakout point.
The SPY’s August peak (286.01) defines a six-month high and is currently under siege.
Placing a finer point on the S&P 500, its mid-year price action remains technical, even amid volatile patches, like the recent Turkey-fueled market whipsaw.
As detailed repeatedly, major support matches the breakout point, an area broadly spanning from 2,787 to 2,802. The 50-day moving average, currently 2,796, effectively bisects this band.
The S&P bottomed last week at 2,802.5 — matching support — and the subsequent sharp rally preserves a bullish intermediate-term bias.
Beyond specific levels, the August market whipsaw has been punctuated by healthy sector rotation, including a transports’ resurgence, detailed in the next section. (Also see Monday’s review, detailing the sub-sector backdrop.)
Separately, the Dow industrials and Nasdaq Composite have maintained trendline support, also strengthening the bull case.
See also: Bull trend absorbs shot across bow, Dow industrials maintain trendline support.
Tuesday’s Watch ListThe 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 FXI, +1.58% has reached a key technical test, rising amid guarded optimism that U.S.-China trade policy progress may be pending.
Specifically, the shares have rallied from 13-month lows, rising to challenge the August breakdown point (41.60). A return to the former range would mark a step toward stabilization.
On further strength, the 50-day moving average (43.10) is closely followed by the range top (44.30). An eventual close higher would mark a “higher high” more firmly neutralizing the mid-year technical breakdown.
Moving to U.S. sectors, the transports have broken out, rising amid easing crude oil prices, detailed Monday.
Specifically, the iShares Transportation Average ETF IYT, +0.77% has knifed to six-month highs, rising from a jagged, but successful, July retest of the 200-day moving average.
More broadly, the upturn punctuates a multi-month continuation pattern — illustrated on the three-year chart — placing the group’s record high, established Jan. 16, firmly within view.
Conversely, the VanEck Vectors Oil Services ETF OIH, +2.18% has broken down amid the August crude-oil price downturn.
Tactically, the breakdown point (24.80) is closely followed by trendline resistance (25.20).
An eventual close higher would neutralize the downdraft, though the group’s technical bias remains bearish pending such a move.
Moving to specific names, Alaska Air Group, Inc. ALK, +0.48% is a large-cap carrier coming to life. (Yield = 2.0%.)
Technically, the shares have knifed to three-month highs, clearing the 200-day moving average. The breakout raises the flag to a primary trend shift.
Tactically, the breakout point closely matches the 200-day moving average, currently 64.60, and the recovery attempt is intact barring a violation.
Initially profiled June 25, CF Industries Holdings, Inc. CF, +0.33% has added 7.8% and remains well positioned.
Earlier this month, the shares gapped to two-year highs, rising from a cup-and-handle pattern defined by the April and July lows.
The subsequent pullback has been orderly, positioning the shares to build on the August spike. Tactically, the top of the gap closely matches the breakout point (46.10) and a posture higher supports a bullish bias.
Public since November 2017, SailPoint Technologies Holdings Inc. SAIL, +1.33% is a mid-cap developer of identity governance software solutions.
As illustrated, the shares have recently knifed to the range top, rising after the company’s second-quarter results.
The subsequent tight range signals muted selling pressure at resistance, improving the chances of eventual follow-through. Tactically, the prevailing range bottom (27.50) closely matches the top of the gap, and a breakout attempt is in play barring a violation.
Universal Display Corp. OLED, +3.57% is a large-cap manufacturer of organic light emitting diode (OLED) technologies used in flat panel displays.
Earlier this month, the shares staged a strong-volume breakout, rising after the company’s quarterly results.
The ensuing flag pattern positions the shares to build on the initial spike. Tactically, a near-term floor matches the range bottom (114.40) and the recovery attempt is intact barring a violation.
Still well positionedThe table below includes names recently profiled in The Technical Indicator that remain well positioned. For the original comments, see The Technical Indicator Library.
Company Symbol Date Profiled Exepdia Group, Inc. EXPE Aug. 15 Kimberly-Clark Corp. KMB Aug. 15 T-Mobile US, Inc. TMUS Aug. 14 Celgene Corp. CELG Aug. 14 Five9, Inc. FIVN Aug. 14 Emerson Electric Co. EMR Aug. 14 Acacia Communications, Inc. ACIA Aug. 13 Zebra Technologies Corp. ZBRA Aug. 13 Unit Corp. UNT Aug. 13 Best Buy Co., Inc. BBY Aug. 10 Avnet, Inc. AVT Aug. 10 Clorox Co. CLX Aug. 10 Bristol-Myers Squibb Co. BMY Aug. 9 United Technologies Corp. UTX Aug. 9 Itron, Inc. ITRI Aug. 9 Teladoc, Inc. TDOC Aug. 9 Paycom Software, Inc. PAYC Aug. 8 Zendesk, Inc. ZEN Aug. 8 Eaton Corp. ETN Aug. 8 Kansas City Southern KSU Aug. 8 iShares Transportation Average ETF IYT Aug. 7 Xilinx, Inc. XLNX Aug. 7 Integrated Device Technology, Inc. IDTI Aug. 7 Myriad Genetics, Inc. MYGN Aug. 7 Health Care Select Sector SPDR XLV Aug. 6 American Tower Corp. AMT Aug. 6 Cognex Corp. CGNX Aug. 6 Phillips 66 PSX Aug. 6 KLA-Tencor Corp. KLAC Aug. 3 Global Payments, Inc. GPN Aug. 3 SM Energy Co. SM Aug. 3 Venom Energy Partners VNOM Aug. 2 Flir Systems, Inc. FLIR Aug. 2 Yext, Inc. YEXT Aug. 1 SunTrust Banks, Inc. STI July 30 Andeavor ANDV July 30 Lattice Semiconductor Corp. LSCC July 30 Amgen, Inc. AMGN July 27 Mosaic Co. MOS July 27 Valero Energy Corp. VLO July 26 Pfizer, Inc. PFE July 25 Northern Trust Corp. NTRS July 24 SS&C Technologies Holdings, Inc. SSNC July 23 Arconic, Inc. ARNC July 23 Taiwan Semiconductor Manufacturing Co. TSM July 20 Bank of America Corp. BAC July 20 JPMorgan Chase and Co. JPM July 19 Cummins, Inc. CMI July 19 Citrix Systems, Inc. CTXS July 18 Corning, Inc. GLW July 18 Kulicke and Soffa Industries, Inc. KLIC July 18 Five Below, Inc. FIVE July 17 Sony Corp. SNE July 16 Celgene Corp. CELG July 16 Walmart, Inc. WMT July 16 National Oilwell Varco, Inc. NOV July 13 Visa, inc. V July 12 Walt Disney Co. DIS July 12 Paychex, Inc. PAYX July 11 RH RH July 11 Coca-Cola Co. KO July 10 Seattle Genetics, Inc. SGEN July 9 Johnson & Johnson JNJ July 5 Kroger Co. KR July 5 Silicon Motion Technology Corp. SIMO July 3 CyrusOne, Inc. CONE July 3 FleetCor Technologies, Inc. FLT July 2 Tandem Diabetes Care, Inc. TNDM July 2 Oceaneering International, Inc. OII June 29 NII Holdings, Inc. NIHD June 29 BioMarin Pharmaceutical, Inc. BMRN June 27 Church & Dwight Co., Inc. CHD June 27 CF Industries Holdings, Inc. CF June 25 Procter & Gamble Co. PG June 22 Semtech Corp. SMTC June 22 Merck & Co., Inc. MRK June 21 Alphabet, Inc. GOOGL June 15 Allergan AGN June 15 Pepsico, Inc. PEP June 14 Mosaic Co. MOS June 13 Consumer Staples Select Sector SPDR XLP June 13 Roku, Inc. ROKU June 12 Viking Therapeutics, Inc. VKTX June 12 Medicines Co. MDCO June 11 Health Care Select Sector SPDR XLV June 8 Monster Beverage Corp. MNST June 7 VMWare, Inc. VMW June 6 SPDR S&P Biotech ETF XBI June 5 Kohl’s Corp. KSS June 5 Union Pacific Corp. UNP May 21 Twilio, Inc. TWLO May 21 SPDR S&P Retail ETF XRT May 15 Lowe’s Companies, Inc. LOW May 14 Texas Instruments, Inc. TXN May 11 PowerShares QQQ Trust QQQ May 10 Coupa Software, Inc. COUP May 8 Apple, Inc. AAPL May 7 Norfolk Southern Corp. NSC May 2 Advanced Micro Devices, Inc. AMD May 1 UnitedHealth Group, Inc. UNH Apr. 30 Nike, Inc. NKE Apr. 30 Costco Wholesale Corp. COST Apr. 26 CSX Corp. CSX Apr. 26 NetApp, Inc. NTAP Apr. 9 Domino’s Pizza, Inc. DPZ Mar. 21 Burlington Stores, Inc. BURL Mar. 14 TJX Companies, Inc. TJX Mar. 6 Chart Industries, Inc. GTLS Mar. 6 LivePerson, Inc. LPSN Feb. 28 VeriSign, Inc. VRSN Feb. 26 ServiceNow, Inc. NOW Feb. 21 Adobe Systems, Inc. ADBE Feb. 16 Salesforce.com, Inc. CRM Feb. 12 Fortinet, Inc. FTNT Jan 19 Sarepta Therapeutics, Inc. SRPT Jan. 3 MSCI, Inc. MSCI Nov. 20 Motorola Solutions, Inc. MSI Nov. 14 Lululemon Athletica, Inc. LULU Oct. 24 HubSpot, Inc. HUBS Oct. 4 Nvidia Corp. NVDA Sept. 27 Bottomline Technologies, Inc. EPAY July 13 GrubHub, Inc. GRUB May 4 Square, Inc. SQ Mar. 3 Microsoft Corp. MSFT Aug. 5Providing critical information for the U.S. trading day. Subscribe to MarketWatch's free Need to Know newsletter. Sign up here.
