Technically speaking, the major U.S. benchmarks continue to digest an October breakout amid still bullish bigger-picture price action.
Against this backdrop, the S&P 500 and Nasdaq Composite have effectively nailed their first significant support — the S&P 3,428 and Nasdaq 11,460 areas — to punctuate a pullback that has thus far inflicted limited damage.
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 weathered its first test of the breakout point (3,428), an area detailed previously.
Monday’s close (3,427) matched support, and Tuesday’s early upturn punctuates a successful retest. Constructive price action.
Tactically, the mid-month gap (3,482) marks notable overhead, a level closely matching consecutive session closes, including the weekly close (3,483).
Similarly, the Dow Jones Industrial Average
has pulled in from its range top.
Tactically, the 2019 close (28,538) has marked an inflection point, a level defining positive year-to-date territory. The Dow has alternated closes lower, and higher, across three straight sessions.
Delving deeper, the 28,000 mark closely matches the 200-day moving average, currently 27,996.
Meanwhile, the Nasdaq Composite
has maintained its first notable support.
The specific area spans from 11,448 to 11,460, also detailed on the daily chart below.
Monday’s session low (11,454) closely matched support to punctuate a successful retest.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq remains in consolidation mode.
As detailed repeatedly, the early-October rally marked a two standard deviation breakout, encompassing consecutive closes atop the 20-day Bollinger bands. The subsequent pullback has filled the gap.
Perhaps more notably, the mid-month downturn has been underpinned by the Nasdaq’s first notable support, circa 11,460. Constructive price action.
Delving deeper, the 50-day moving average, currently 11,270, is closely followed by the breakout point (11,245). The Nasdaq’s intermediate-term bias remains bullish barring a violation.
Looking elsewhere, the Dow Jones Industrial Average is digesting a less decisive October breakout.
Against this backdrop, the index has pulled in to its former range. Tactically, the February gap (28,403) remains an inflection point.
Delving deeper, the 50-day moving average, currently 27,996, closely matches the 28,000 mark. A posture atop this area signals a comfortably bullish intermediate-term bias.
Recall that the 50-day moving average (in blue) underpinned the May, June and late-July lows.
Meanwhile, the S&P 500 has effectively nailed its first significant support.
To reiterate, Monday’s close (3,427) matched the breakout point (3,428) to punctuate a successful initial retest.
The bigger picture
As detailed above, the major U.S. benchmarks are acting relatively well technically.
On a headline basis, the S&P 500 and Nasdaq Composite have weathered a pullback from one-month highs, effectively nailing their first significant support — the S&P 3,428 and Nasdaq 11,460 areas.
Against this backdrop, each benchmark’s intermediate-term bias remains bullish. The mid-month downturn has inflicted limited damage in the broad sweep.
Moving to the small-caps, the iShares Russell 2000 ETF has sustained a break to seven-month highs.
In the process, the small-cap benchmark has registered nine consecutive closes atop its breakout point, circa 159.80.
Similarly, the SPDR S&P MidCap 400 ETF is holding seven-month highs.
Here again, notable support matches the breakout point, circa 360.20.
Slightly more broadly, the small- and mid-caps have asserted tandem bull flags, digesting breaks to less-charted territory. Constructive price action.
Looking elsewhere, the SPDR Trust S&P 500
is digesting a rally to one-month highs.
The mid-October peak marked the SPY’s third-best close on record, and has been punctuated by a comparably flat downturn.
On a granular note, consider that last week’s rallies (Monday and Friday) registered amid increased volume, and have been punctuated by lighter-volume pullbacks. Constructive price action.
Placing a finer point on the S&P 500, the index has nailed its first notable support.
To reiterate, Monday’s close (3,427) matched the breakout point (3,428) to punctuate a successful initial retest.
Separately, recall that the mid-month gap (3,482) marks notable overhead, a level closely matching consecutive session closes, including the weekly close (3,483).
More broadly, the S&P 500’s mid-month pullback remains flattish to punctuate an initially sharp two standard deviation breakout, encompassing a single close atop the 20-day Bollinger bands.
The “expected” consolidation phase, or cooling-off period, remains underway.
As detailed repeatedly, the S&P’s first significant support (3,428) is followed by the 50-day moving average, currently 3,403, and the former breakout point (3,393).
Delving deeper, likely last-ditch support (3,328) matches the late-September gap, an area from which the steep October rally originates. The S&P 500’s intermediate-term bias remains bullish barring a violation.
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 VanEck Vectors Semiconductor ETF
is acting well technically.
Earlier this month, the group reached record territory, clearing resistance matching the September peak.
The subsequent pullback has been comparably flat, placing the group near the breakout point (184.60) and 2.9% under the October peak.
Delving deeper, the former range top (174.75) closely matches the 50-day moving average, currently 174.90. A sustained posture higher signals a comfortably bullish bias.
Moving to specific names, Micron Technology, Inc.
is a well positioned large-cap semiconductor name.
Technically, the shares have rallied to the range top, rising to challenge four-month highs. The chart illustrates a head-and-shoulders bottom defined by the late-June, August and October lows.
More immediately, the prevailing upturn punctuates a tight one-week range — amid tandem volume spikes — laying the groundwork for a potential breakout.
Tactically, a near-term floor closely matches gap support, circa 50.80, and is followed by the 200-day moving average, currently 49.15. A breakout attempt is in play barring a violation.
Initially profiled Aug. 10, Freeport-McMoRan, Inc.
has returned 19.2% and remains well positioned.
Earlier this month, the shares rallied to the range top, rising to challenge two-year highs on increased volume. The subsequent tight range has formed amid decreased volume, signaling muted selling pressure near resistance.
Tactically, a near-term target projects to the 19.50 area on follow-through. Conversely, trendline support closely tracks the ascending 50-day moving average, currently 15.75. A sustained posture higher signals a bullish bias.
Note that the company’s quarterly results are due out Thursday, Oct. 22.
is a large-cap provider of online education solutions.
As illustrated, the shares have rallied to press record highs, territory matching the August peak.
Underlying the upturn, Chegg’s relative strength index (not illustrated) has recently notched its best levels since May, improving the chances of eventual follow-through.
Tactically, a near-term floor (81.90) closely matches the former range top and last week’s low. A breakout attempt is in play barring a violation.
Finally, Gogo, Inc.
is a small-cap provider of in-flight connectivity and wireless entertainment services.
The shares initially spiked seven weeks ago, rising after the company announced the sale of its commercial aviation business unit.
The subsequent range is a bullish continuation pattern, positioning the shares to build on the initial strong-volume spike. Tactically, the 20-day moving average, currently 9.95, has underpinned the recent range. The prevailing breakout attempt is intact 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.
|Company||Symbol* (Click symbol for chart.)||Date Profiled|
|Atlassian Corp.||TEAM||Oct. 19|
|Vulcan Materials Co.||VMC||Oct. 19|
|iRobot Corp.||IRBT||Oct. 19|
|Utilities Select Sector SPDR||XLU||Oct. 19|
|Northern Trust Co.||NTRS||Oct. 16|
|XPO Logistics, Inc.||XPO||Oct. 16|
|ON Semiconductor Corp.||ON||Oct. 16|
|Ford Motor Co.||F||Oct. 15|
|Texas Instruments, Inc.||TXN||Oct. 15|
|Skyworks Solutions, Inc.||SWKS||Oct. 14|
|International Business Machines Corp.||IBM||Oct. 14|
|CRISPR Therapeutics A.G.||CRSP||Oct. 14|
|Amazon.com, Inc.||AMZN||Oct. 13|
|First Solar, Inc.||FSLR||Oct. 13|
|Nevro Corp.||NVRO||Oct. 12|
|Teradyne, Inc.||TER||Oct. 12|
|SPDR S&P Homebuilders ETF||XHB||Oct. 9|
|Broadcom, Inc.||AVGO||Oct. 9|
|STMicroelectronics N.V.||STM||Oct. 9|
|Shake Shack, Inc.||SHAK||Oct. 9|
|SPDR S&P Biotech ETF||XBI||Oct. 8|
|Alexion Pharmaceuticals, Inc.||ALXN||Oct. 8|
|Twilio, Inc.||TWLO||Oct. 8|
|Cloudflare, Inc.||NET||Oct. 7|
|Ceridian HCM Holding, Inc.||CDAY||Oct. 7|
|Guess, Inc.||GES||Oct. 7|
|Gap, Inc.||GPS||Oct. 6|
|Motorola Solutions, Inc.||MSI||Oct. 6|
|Sunnova Energy International, Inc.||NOVA||Oct. 6|
|SBA Communications Corp.||SBAC||Oct. 5|
|Marvell Technology Group,Ltd.||MRVL||Oct. 5|
|Qorvo, Inc.||QRVO||Oct. 2|
|NCR Corp.||NCR||Oct. 2|
|LGI Homes, Inc.||LGIH||Oct. 2|
|SailPoint Technology Holdings, Inc.||SAIL||Oct. 1|
|Martin Marietta Materials, Inc.||MLM||Sept. 30|
|Whirlpool Corp.||WHR||Sept. 29|
|Abercrombie & Fitch Co.||ANF||Sept. 29|
|American Eagle Outfitters||AEO||Sept. 28|
|Twitter, Inc.||TWTR||Sept. 28|
|Blueprint Medicines Co.||BPMC||Sept. 28|
|Zendesk, Inc.||ZEN||Sept. 23|
|Datadog, Inc.||DDOG||Sept. 23|
|Scientific Games Corp.||SGMS||Sept. 23|
|Maxar Technologies, Inc.||MAXR||Sept. 18|
|V.F. Corp.||VFC||Sept. 14|
|Crocs, Inc.||CROX||Sept. 14|
|Five Below, Inc.||FIVE||Sept. 10|
|Dow Inc.||DOW||Sept. 10|
|Eastman Chemical Co.||EMN||Sept. 10|
|CrowdStrike Holdings, Inc.||CRWD||Sept. 9|
|Workhorse Group, Inc.||WKHS||Sept. 9|
|International Paper Co.||IP||Sept. 3|
|Anaplan, Inc.||PLAN||Sept. 2|
|Beyond Meat, Inc.||BYND||Sept. 1|
|Elastic N.V.||ESTC||Sept. 1|
|Celanese Corp.||CE||Aug. 26|
|Norfolk Southern Corp.||NSC||Aug. 25|
|Westlake Chemical Corp.||WLK||Aug. 25|
|Deere & Co.||DE||Aug. 24|
|PulteGroup, Inc.||PHM||Aug. 24|
|Expedia Group, Inc.||EXPE||Aug. 24|
|Johnson Controls International||JCI||Aug. 21|
|Adobe, Inc.||ADBE||Aug. 20|
|Canadian Solar, Inc.||CSIQ||Aug. 20|
|General Motors Co.||GM||Aug. 20|
|Starbucks Corp.||SBUX||Aug. 18|
|Builders FirstSource, Inc.||BLDR||Aug. 18|
|Steel Dynamics, Inc.||STLD||Aug. 17|
|Elanco Animal Health, Inc.||ELAN||Aug. 17|
|Brinker International, Inc.||EAT||Aug. 13|
|Enphase Energy, Inc.||ENPH||Aug. 13|
|Nike, Inc.||NKE||Aug. 11|
|Nucor Corp.||NUE||Aug. 11|
|Freeport McMoRan, Inc.||FCX||Aug. 10|
|Natera, Inc.||NTRA||Aug. 10|
|Lennar Corp.||LEN||Aug. 7|
|McDonald’s Corp.||MCD||Aug. 7|
|Industrial Select Sector SPDR||XLI||Aug. 6|
|Sunrun, Inc.||RUN||Aug. 5|
|Penn National Gaming, Inc.||PENN||July 30|
|Procter & Gamble Co.||PG||July 29|
|SPDR S&P Metals & Mining ETF||XME||July 28|
|iShares MSCI South Korea ETF||EWY||July 28|
|Toll Brothers, Inc.||TOL||July 27|
|Advanced Micro Devices, Inc.||AMD||July 23|
|Best Buy Co., Inc.||BBY||July 22|
|Materials Select Sector SPDR||XLB||July 20|
|Caterpillar, Inc.||CAT||July 20|
|iShares U.S. Home Construction ETF||ITB||July 17|
|Progressive Corp.||PGR||July 17|
|Livongo Health, Inc.||LVGO||July 17|
|Roku, Inc.||ROKU||July 16|
|Cognizant Technology Solutions, Inc.||CTSH||July 16|
|Consumer Staples Select Sector SPDR||XLP||July 15|
|Home Depot, Inc.||HD||July 15|
|Costco Wholesale Corp.||COST||July 15|
|Air Products & Chemicals, Inc.||APD||July 14|
|Consumer Discretionary Select Sector SPDR||XLY||July 13|
|SunPower Corp.||SPWR||July 13|
|Walmart, Inc.||WMT||July 8|
|Big Lots, Inc.||BIG||July 1|
|Tandem Diabetes Care, Inc.||TNDM||July 1|
|Dell Technologies, Inc.||DELL||June 30|
|Danaher Corp.||DHR||June 24|
|Lowe’s Companies||LOW||June 19|
|Fiverr International, Ltd.||FVRR||June 19|
|Etsy, Inc.||ETSY||June 17|
|HubSpot, Inc.||HUBS||June 8|
|Square, Inc.||SQ||June 8|
|United Parcel Service, Inc.||UPS||June 5|
|FedEx Corp.||FDX||June 3|
|SPDR S&P Retail ETF||XRT||June 3|
|iShares MSCI Japan ETF||EWJ||May 29|
|SolarEdge Technologies, Inc.||SEDG||May 29|
|Synopsis, Inc.||SNPS||May 27|
|Agilent Technologies, Inc.||A||May 15|
|Qualcomm, Inc.||QCOM||May 12|
|Salesforce.com, Inc.||CRM||May 8|
|Facebook, Inc.||FB||May 7|
|Spotify Technology S.A.||SPOT||May 5|
|Dollar General Corp.||DG||Apr. 28|
|ServiceNow, Inc.||NOW||Apr. 27|
|Five9, Inc.||FIVN||Apr. 24|
|Chewy, Inc.||CHWY||Apr. 24|
|Tesla, Inc.||TSLA||Apr. 23|
|VanEck Vectors Semiconductor ETF||SMH||Apr. 17|
|Veeva Systems, Inc.||VEEV||Apr. 17|
|Okta, Inc.||OKTA||Apr. 16|
|Target Corp.||TGT||Apr. 16|
|Invesco QQQ Trust||QQQ||Apr. 14|
|DocuSign, Inc.||DOCU||Apr. 3|
|Zscaler, Inc.||ZS||Apr. 3|
|Apple, Inc.||AAPL||Mar. 27|
|Nvidia Corp.||NVDA||Mar. 27|
|Zoom Video Communications, Inc.||ZM||Mar. 19|
|iShares MSCI Emerging Markets ETF||EEM||Mar. 19|
|SPDR Gold Shares ETF||GLD||Jan. 2|
|Microsoft Corp.||MSFT||Feb. 22|
|* Click each symbol for current chart.|