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CINCINNATI (MarketWatch) -- The major U.S. stock benchmarks have broken out, and, to this point, market bears remain conspicuously absent.
Though near-term extended -- and due to consolidate -- significant support is detailed below:
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 sustained its break to four-year highs. Though near-term overbought, its steep breakout is longer-term bullish.
Looking ahead, notable support rests around the May 2008 peak of 1,440.
Conversely, initial resistance holds at the September high of 1,474.
Meanwhile, the Dow industrials' near-term backdrop is similar.
Here again, the blue-chip benchmark has sustained a break to four-year highs.
Its first notable support rests at its breakout point of 13,330, better illustrated on the daily chart.
Conversely, initial resistance holds at the September peak of 13,653.
And the Nasdaq Composite has also sustained the September breakout.
From current levels, near-term support rests at 3,168 (Monday's low) and is followed by a deeper floor just under 3,140.
Meanwhile, initial resistance holds at the September peak of 3,195.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has broken decisively to 11-year highs.
Its breakout point -- the March peak -- now marks significant support.
Conversely, the Nasdaq's immediate overhead remains limited, though the May 2000 close of 3,400 marks a potential target.
Moving to the Dow, its six-month backdrop is equally constructive.
As detailed last week, an intermediate-term target can be projected to about 13,700 based on the depth of the late-August pullback.
The Dow's September high has thus far come in at 13,653.
And the S&P 500 has also sustained its breakout.
From current levels, initial support holds at the May 2008 peak of 1,440 -- better illustrated on the hourly chart -- and is followed by the S&P's breakout point, the April peak of 1,422.
The bigger picture
As detailed above, the major U.S. benchmarks have sustained the September breakout.
And though near-term overbought -- and due to consolidate -- each benchmark remains on firm technical footing.
The SPDR Trust S&P 500's (SPY) backdrop furthers the point.
Consider that last week's breakout was punctuated by a volume spike, while the subsequent "pullback" has been shallow, driven by decreased volume.
So despite the steep September rally, U.S. stocks continue to face limited selling pressure.
And more often than not, the solution to limited selling pressure is higher prices. At a certain price point, sellers should emerge. (An adverse catalyst would also drive prices lower, though the central banks have been conspicuously proactive.)
Against this backdrop, the major support points should be familiar. Specifically:
S&P 500 support at its breakout point of 1,422.
Dow support at its breakout point of 13,330.
And Nasdaq support in the 3,134-to-3,140 area.
In each case above, the first pullback to support "should" draw buyers.
Summing up the backdrop
Tactically speaking, the major benchmarks are near-term overbought, and due to consolidate.
Nonetheless, the September breakout is firmly-grounded, and each benchmark's longer-term path of least resistance points higher.
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.
Charting the crude oil "mini crash"
Drilling down further, the charts above illustrate crude oil's mini "flash crash."
The United States Oil Fund (USO) tracks the price of West Texas Intermediate (WTI) light, sweet, crude oil.
Though largely unexplained, the USO plunged nearly 4% in about five minutes in Monday's action.
The downdraft was driven by a volume spike, likely laying the groundwork for a more extended consolidation phase. (This is more an illustration than a technical setup.)
ETFSymbolMon CloseSupport ResistanceiShares MSCI Singapore IndexEWS$13.61$13.30$13.80
Looking elsewhere, the iShares MSCI Singapore Index ETF (EWS) is acting well technically. (Yield = 3.6%.)
Late last week, the group knifed to 52-week highs, clearing resistance at the August peak.
Though near-term extended, and due to consolidate, a pullback toward the breakout point would offer a high risk/reward entry.
ETFSymbolMon CloseSupport ResistanceiShares MSCI Brazil IndexEWZ$56.48$55.50$58.00
Similarly, the iShares MSCI Brazil Index ETF (EWZ) has also come to life. (Yield = 2.8%.)
Specifically, the group has knifed to three-month highs, clearing well-defined resistance.
Consider that this week's pullback has been driven by decreased volume -- suggesting that sell pressure is limited -- placing the shares at an attractive entry near the breakout point.
CompanySymbolMon CloseSupport ResistanceVale S.A.VALE$19.37$18.20$19.75
Vale S.A. (VALE) is a Brazil-based manufacturer of steel and related basic metals. (Yield = 5.9%.)
Technically speaking, the shares have spiked from a five-month downtrend that closely tracked the 50-day moving average.
The breakout signals a trend shift, and its path of least resistance points higher barring a violation of trendline support.
CompanySymbolMon CloseSupport ResistanceNorthern Trust Corp
Initially profiled Sept. 6, Northern Trust Corp. (NTRS) remains well positioned. (Yield = 2.4%.)
As illustrated, the shares have broken from a head-and-shoulders bottom, notching 52-week highs.
Underlying the upturn, its relative strength index (not illustrated) has touched its best levels since March, improving the chances of further gains.
A pullback toward the breakout point would offer a high risk/reward entry.
CompanySymbolMon CloseSupport ResistanceCree, Inc.CREE$28.79$27.10$29.50
Cree, Inc. (CREE) is a well positioned mid-cap name.
The shares initially spiked four weeks ago, clearing the 200-day moving average following the company's quarterly results.
Since then, it has sustained its gains, and its tight trading range positions the shares to build on the August breakout.
CompanySymbolMon CloseSupport ResistanceParametric Technology Corp
Parametric Technology Corp. (PMTC) is a mid-cap product-management software vendor.
Technically speaking, the shares have knifed to five-month highs, clearing well-defined resistance.
The breakout leaves it with limited immediate resistance, and the risk/reward can be favorable from current levels with a stop at the former range top.
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.
CompanySymbolDate ProfiledYamana Gold, Inc.Sept. 17Ctrip.com International, Ltd.Sept. 17BroadSoft, Inc.Sept. 17CommVault Systems, Inc.Sept. 17Financial Select Sector SPDR Sept. 14Technology Select Sector SPDRSept. 14iShares Emerging Markets Index Sept. 14Materials Select Sector SPDR Sept. 14Charter CommunicationsSept. 13Ulta Salon, Cosmetics & FragranceSept. 13IxiaSept. 13V.F. Corp.Sept. 13Tiffany & Co.Sept. 13Alnylam Pharmaceuticals, Inc.Sept. 13Valspar Corp.Sept. 12IPG Photonics Corp.Sept. 12XL Group, plcSept. 12Allscripts Healthcare SolutionsSept. 12Consumer Discretionary SPDRSept. 11FMC Corp.Sept. 11Williams-Sonoma, Inc.Sept. 11Kinross Gold Corp.Sept. 11SPDR S&P Regional Banking ETFSept. 10General ElectricSept. 10Acme Packet, Inc.Sept. 10Kansas City SouthernSept. 10Melco Crown EntertainmentSept. 10S&P Retail ETFSept. 7Biogen Idec, Inc.Sept. 7Athenahealth, Inc.Sept. 7Acuity Brands, Inc.Sept. 7Northern Trust Corp.Sept. 6Yandex N.V.Sept. 6Cirrus Logic, Inc.Sept. 6iShares Dow Jones U.S. Telecom ETFSept. 5Morgan StanleySept. 5Nordson Corp.Sept. 5McCormick & Co.Sept. 5Silicon Graphics InternationalSept. 5Synopsys, Inc.Sept. 4Skyworks Solutions, Inc.Sept. 4Newmont Mining Corp.Sept. 4Ansys, Inc.Aug. 29Goldman Sachs Group, Inc.Aug. 29Realty Income Corp.Aug. 29SPDR S&P Homebuilders ETFAug. 28Seagate TechnologyAug. 28Apple, Inc.Aug. 27American International Group, Inc.Aug. 27InterDigital, Inc.Aug. 27Chevron Corp.Aug. 24Skechers USA, Inc.Aug. 24Silver Standard Resources, Inc.Aug. 24SPDR Gold Shares Aug. 23Cubist Pharmaceuticals, Inc.Aug. 23iShares Silver Trust Aug. 22Wells Fargo & Co.Aug. 22Cadence Design Systems, Inc.Aug. 22Expedia, Inc.Aug. 21Affymax, Inc.Aug. 21Valero Energy Corp.Aug. 20RPC, Inc.Aug. 20Whiting Petroleum Corp.Aug. 20Pharmacyclics, Inc.Aug. 20Las Vegas Sands Corp.Aug. 17Dillard's, Inc.Aug. 17Chico's FAS, Inc.Aug. 17Google, Inc.Aug. 16IAC/InterActiveCorpAug. 16Urban Outfitters, Inc.Aug. 16Consumer Discretionary Select Sector SPDRAug. 15United Technologies Corp.Aug. 15ASML Holding NVAug. 15Gilead Sciences, Inc. GILDAug. 15Alliant Techsystems, Inc.Aug. 14FEI CompanyAug. 14Fossil, Inc.Aug. 14SPDR S&P Retail ETFAug. 13Sohu.comAug. 13DirecTVAug. 13SolarWinds, Inc.Aug. 13Unilever plcAug. 13EnerSys Aug. 10Siemens AG Aug. 10Patterson-UTI Energy Inc.Aug. 10SPDR S&P Homebuilders ETFAug. 9Lennar Corp.Aug. 9KBR, Inc.Aug. 9Materials Select Sector SPDRAug. 8AT& T, Inc.Aug. 8Texas Instruments, Inc.Aug. 8Sina Corp.Aug. 8Flowserve Corp.Aug. 7Amazon.com, Inc.Aug. 6Under Armour, Inc.Aug. 6Fluor Corp. FLRAug. 6Technology Select Sector SPDRAug. 3Panera Bread Co.Aug. 3Canadian Pacific RailwayAug. 3Tractor Supply Co.Aug. 3Prudential Financial, Inc.Aug. 3Trinity Industries, Inc.Aug. 3NetSuite, Inc.Aug. 2Allstate Corp.Aug. 2U.S. BancorpAug. 2Foster Wheeler AGAug. 2Pfizer, Inc.Aug. 1Hess Corp.Aug. 1Akamai Technologies, Inc.Aug. 1AOL, Inc.Aug. 1Alexion Pharmaceuticals, Inc.July 31Watson Pharmaceuticals, Inc.July 31Pulte Group, Inc.July 31OmniVision Technologies, Inc.July 31Industrial Select Sector SPDRJuly 30International Business MachinesJuly 30Home Depot, Inc.July 30National Oilwell Varco, Inc.July 30Market Vectors Oil Services ETFJuly 27Crown Castle International Corp.July 27Biogen Idec, Inc.July 27Express Scripts Holding Co.July 26Stanley Black & Decker, Inc.July 26Honeywell International, Inc.July 26PPG Industries, Inc.July 25Toll Brothers, Inc.July 24CF Industries Holdings, Inc.July 23AO Smith Corp.July 23General ElectricJuly 20Qualcomm, Inc.July 20RPC Inc.July 19Stratasys, Inc.July 193M Co.July 19InterOil Corp.July 18Schlumberger Ltd.July 18Monsanto Co.July 17Citizens Republic Bancorp, Inc.July 17Energy Select Sector SPDRJuly 17Market Vectors Oil Services ETFJuly 16Simon Property Group, Inc.July 16HCP, Inc.July 13American Tower Corp.July 11United Therapeutics Corp.July 11Phillip Morris International, Inc.July 10Oceaneering International, Inc.July 10Raytheon Co.July 10iShares Dow Jones U.S. Real Estate ETFJuly 9Abbott LaboratoriesJuly 9Consumer Staples Select Sector SPDRJuly 6Whirlpool Corp.July 6SPDR S&P Regional Banking ETFJuly 5Agrium, Inc.July 5Gartner, Inc.July 5Eli Lilly & Co.July 2Gulfport Energy Corp.June 29Visa, Inc.June 28National Fuel Gas Co.June 28MDC Holdings, Inc.June 28Costco WholesaleJune 27AT&T, Inc.June 26Health Care Select Sector SPDRJune 21Texas Capital BancShares, Inc.June 21SBA Communications Corp.June 20iShares Nasdaq Biotechnology ETFJune 19Smart Balance, Inc.June 15Blucora, Inc.June 14Target Corp.June 11Athenaheath, Inc.June 11AuthenTec, Inc.June 11Edwards Lifesciences Corp.June 8Utilities Select Sector SPDRJune 6The Medicines CompanyJune 63D Systems Corp.May 23Charter Communications, Inc.May 22Lumber Liquidators Holdings, Inc.May 21Ryland Group, Inc.May 16Walt Disney Co.May 16Canadian National RailwayMay 15Equinix, Inc.May 2Amgen, Inc.Apr. 26Ebay, Inc.Apr. 10TJX Companies, Inc. Sept. 19