Technically speaking, the U.S. benchmarks have taken flight to conclude August, and potentially consequential breakouts remain underway.
Against this backdrop, the S&P 500 has extended its rally to uncharted territory — tagging the 2,900 mark for the first time on record — while the Nasdaq Composite has concurrently reached all-time highs, venturing atop the 8,000 mark.
Before detailing the U.S. markets’ wider view, the S&P 500’s SPX, +0.00% hourly chart highlights the past two weeks.
As illustrated, the S&P has cleared the range top, knifing to all-time highs.
Tactically, the breakout point (2,873) pivots to support. Conversely, a near- to intermediate-term target projects to the 2,924 area, detailed previously.
Meanwhile, the Dow Jones Industrial Average has tagged six-month highs.
The upturn places it atop the 26,000 mark for the first time since February.
Tactically, the former range top (25,888) closely matches the top of the gap (25,882) and pivots to near-term support.
Against this backdrop, the Nasdaq Composite COMP, +0.11% has knifed to record territory, also clearing the 8,000 mark for the first time.
A near-term floor matches the top of the gap (7,976) and is followed by the firmer breakout point (7,933), also illustrated below.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has gapped to uncharted territory, extending its rally from trendline support. Targets project from recent lows to the 8,115, 8,190 and 8,260 areas.
Conversely, first support matches the breakout point (7,933) and is followed by the more important trendline, a level closely tracking the 50-day moving average.
Looking elsewhere, the Dow Jones Industrial Average has extended its break to six-month highs.
The prevailing upturn originates from a mid-month retest of trendline support and the 50-day moving average.
On further strength, additional overhead matches the January post-breakdown peak (26,338) and the top of the January gap (26,435). Also recall that a technical target projects from the August low to about 26,420.
Meanwhile, the S&P 500 has gapped to record territory.
The prevailing upturn originates from major support (2,802) matching the former breakout point. To reiterate, a near-term target projects to the 2,924 area. (Start with the early-August peak and subtract major support: 2,863 - 2,802 = 61 points. Then, add the result back: 2,863 + 61 = 2,924.)
The bigger pictureAs detailed above, the U.S. benchmarks’ bigger-picture market backdrop continues to strengthen.
On a headline basis, the S&P 500 and Nasdaq Composite have knifed to all-time highs, reaching uncharted territory, capped by no true resistance.
Moreover, the initial selling pressure at record territory has been muted, and when sellers are absent, prices rise to draw sellers.
Moving to the small-caps, the iShares Russell 2000 ETF has extended a previously modest break to record territory.
The breakout resolves a double bottom — defined by the June and July lows — and a near- to intermediate-term target projects to the 175.50 area.
Meanwhile, the SPDR S&P MidCap 400 has knifed more decisively to record territory.
The breakout resolves a bullish ascending triangle, and punctuates a successful test of trendline support. A near-term target projects to the 375 area.
Looking elsewhere, the SPDR Trust S&P 500 has also extended its August rally to record highs. The prevailing upturn punctuates a successful mid-month retest of the breakout point.
Placing a finer point on the S&P 500, the index has gapped to uncharted territory, rising from major support at the mid-August low (2,802).
From current levels, the breakout point marks a well-defined floor (2,873) closely matching the January peak and last week’s close. The initial retest of this area would be expected to draw buyers.
Conversely, the S&P 500’s next target projects from the mid-August low to the 2,924 area, detailed previously.
Much more broadly, the S&P 500 is rising from a jagged, and relatively deep, year-to-date consolidation phase, pinned to the steep 2017 rally. The range spanned 341 points from peak to trough, or about 11.9%.
The prevailing break from this challenging range opens the path to uncharted territory, and potentially meaningful follow-through. Recall that a truly longer-term target projects to the 3,210 area from the 2018 range. (Start with the range top and subtract the 2018 low: 2,873 - 2,532 = 341 points. Then, add back to the breakout point: 2,873 + 341 = 3,214.)
The quality of the prevailing breakout, still underway, will likely add color.
See also: Charting an August breakout attempt, S&P 500 approaches record territory.
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.
U.S. sub-sector backdrop strengthens — Charting the traditional sector leadersDrilling down further, the U.S. sub-sector backdrop has strengthened amid still rotational price action. Quickly consider the traditional sector leaders: The transports, financials and technology sector.
To start, the iShares Transportation Average ETF has reached record highs. The prevailing bull flag is a continuation pattern, underpinned by the breakout point.
More broadly, the upturn punctuates a multi-month continuation pattern — illustrated on the three-year chart — opening the path to potentially material follow-through.
As an economically-sensitive sector, the group’s resurgence strengthens the bull case. (Raw materials are transported to manufacturing facilities amid increased economic activity, and then finished goods are re-transported to points of sale.)
Meanwhile, the Invesco QQQ Trust QQQ, +0.14% tracks the Nasdaq 100 and offers a large-cap technology proxy.
As illustrated, the group has knifed to all-time highs, clearing resistance matching the July peak.
Tactically, the breakout point (182.90) is followed by trendline support, a level closely tracking the 50-day moving average, currently 178.20. The prevailing uptrend is firmly intact barring a violation.
Against this backdrop, the Financial Select Sector SPDR XLF, -0.16% is belatedly coming to life.
Specifically, the group has reached five-month highs, amid a volume uptick, escaping a formerly jagged range. Tactically, the former range top (28.50) is followed by the 200-day moving average (27.95) and the group’s breakout attempt is intact barring a violation.
The financials’ resurgence dovetails with the 10-year Treasury note yield’s stabilization near major support, an area detailed last week.
Participation broadens beyond the sector leadersLooking elsewhere, sector participation has also broadened beyond the traditional leaders.
As illustrated, the Industrial Select Sector SPDR XLI, -0.21% has reached five-month highs, rising from a modified double bottom defined by the May and June lows.
The breakout punctuates a successful test of the major moving averages, opening the path to a projected target around 80.00. Conversely, the breakout point (77.00) pivots to well-defined support.
Meanwhile, the SPDR S&P Retail ETF XRT, +0.14% is digesting an August rally to all-time highs.
Tactically, the breakout point pivots to support (51.00) and is followed by the trendline, a level roughly tracking the 50-day moving average, currently 50.20. The group’s uptrend is intact barring a violation.
Beyond the U.S., the iShares Emerging Markets ETF EEM, -0.33% is showing signs of life technically.
Specifically, the shares have rallied from 13-month lows, edging atop trendline resistance on increased volume.
On further strength, major resistance matches the breakdown point (45.10). A close higher would mark a “higher high” more firmly signaling a trend shift.
Conversely, trendline support closely tracks the 50-day moving average, currently 43.55. The prevailing 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 Deere & Co. DE Aug. 27 Marathon Petroleum Corp. MPC Aug. 27 Neurocrine Biosciences, Inc. NBIX Aug. 27 Lululemon Athletica, Inc. LULU Aug. 27 Delta Air Lines, Inc. DAL Aug. 24 Hortonworks, Inc. HDP Aug. 24 Ligand Pharmaceuticals, Inc. LGND Aug. 24 RingCentral, Inc. RNG Aug. 23 Take-Two Interactive Software, Inc. TTWO Aug. 23 Splunk, Inc. SPLK Aug. 23 Global Blood Therapeutics, Inc. GBT Aug. 23 Cisco Systems, Inc. CSCO Aug. 22 F5 Networks, Inc. FFIV Aug. 22 Boston Scientific Corp. BSX Aug. 22 Industrial Select Sector SPDR XLI Aug. 22 Universal Display Corp. OLED Aug. 21 SailPoint Technologies Holdings, Inc. SAIL Aug. 21 Alaska Air Group, Inc. ALK Aug. 21 Kimberly-Clark Corp. KMB Aug. 15 T-Mobile US, Inc. TMUS 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 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.
