UPDATE: Bull trend intact: S&P 500 sustains break to uncharted territory
By Michael Ashbaugh, MarketWatch
Focus: Transports sustain trendline breakout, Silver extends mid-year spike, IYT, SLV, KLAC, ROKU, SPLK, KSU
Technically speaking, the major U.S. benchmarks are digesting a July breakout, pulling in modestly from record territory.
In the process, the S&P 500 has maintained near-term support (2,973) against a still comfortably bullish intermediate-term backdrop.
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 to its former range from record territory.
Recall that near-term support (2,973) closely matches the 20-day moving average, currently 2,976. Last week's low (2,973.1) matched support, punctuating a successful initial retest.
Meanwhile, the Dow industrials' near-term backdrop remains the strongest.
In its case, recall that near-term support matches the bottom of the July gap (27,088).
Monday's session low (27,088.9) matched gap support, punctuating a second recent successful retest. Bullish price action.
Against this backdrop, the Nasdaq Composite has staged a shaky, but successful, test of major support.
The specific level rests at the breakout point (8,172) an area also detailed on the daily chart below.
Here again, Monday's session low (8,171.5) matched support, preserving a range-bound backdrop just under record territory.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has weathered a shaky retest of its breakout point, the 8,172-to-8,176 area, detailed repeatedly.
Deeper support matches the top of the gap (8,059) a level also defining the July low. An eventual violation would mark a "lower low" raising a technical question mark.
Looking elsewhere, the Dow Jones Industrial Average has staged the most decisive July breakout.
The rally initially registered as a bullish two standard deviation breakout, encompassing consecutive closes atop the 20-day volatility bands, detailed previously (). The subsequent pullback has been comparably flat, likely laying the groundwork for upside follow-through.
Tactically, the July breakout point (26,966) marks the Dow's first notable floor. Delving deeper, the prevailing rally punctuates a successful test of the April peak (26,696).
Meanwhile, the S&P 500 is also digesting a July break to previously uncharted territory.
Tactically, recall that the S&P has not closed under its 20-day moving average, currently 2,976, since June 5. The 20-day closely matches near-term support (2,973) and has thus far underpinned the prevailing pullback.
The bigger picture
As detailed above, the major U.S. benchmarks are acting well technically.
Each index started July with a breakout -- reaching all-time highs -- and the subsequent pullback has been orderly, thus far inflicting limited damage.
Though a near-term consolidation phase remains underway, each benchmark's intermediate-term bias remains comfortably bullish.
Moving to the small-caps, the iShares Russell 2000 ETF continues to lag behind amid range-bound July price action.
Tactically, the prevailing range bottom, also the month-to-date low (153.68), is closely followed by the 50-day moving average, currently 152.78.
Similarly, the SPDR S&P MidCap 400 is traversing a tight July range.
Combined, the small- and mid-caps have flatlined to start the third quarter even amid respectable technical breakouts elsewhere.
Against this backdrop, the SPDR Trust S&P 500 remains comparably stronger.
From current levels, the mid-July low (296.70) closely matches the 20-day moving average, currently 296.90.
Delving deeper, notable support matches the July 1 gap (294.33). The SPY has not subsequently traded under this level.
Placing a finer point on the S&P 500, the index has staged an orderly pullback from record territory.
To reiterate, near-term support (2,973) closely matches the 20-day moving average. Last week's low (2,973.1) matched support, punctuating a successful retest.
Delving deeper, recall that a firmer floor matches the June peak (2,964).
Against this backdrop, the post-breakout low (2,963.4), established July 9, matched support punctuating a successful retest. (Also see the hourly chart.)
And delving incrementally deeper, the S&P's next significant floor rests at 2,912. This level matched the late-June low (2,912.99) and launched the July break to record territory.
To the extent the S&P 500 continues to register "higher lows" -- matching well-defined support -- its intermediate-term bias remains bullish. A violation of the 2,912 area would raise a technical question mark.
Beyond specific levels, U.S. sub-sector participation continues to broaden, and has room to incrementally strengthen, an added market tailwind.
See also: Charting a break to 'clear skies' territory, S&P 500 sustains rally atop 3,000 mark ().
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 Transportation Average ETF has come to life technically.
Recall that the group started July with a trendline breakout, also clearing the 50- and 200-day moving averages.
The ensuing pullback has been underpinned by the trendline, and punctuated by mid-month follow-through higher. Tactically, the 200-day moving average is closely followed by the trendline, and the group's recovery attempt is intact barring a violation.
As an economically-sensitive sector, and former market laggard, the transports' resurgence strengthens the bull case.
Initially profiled June 20 (iShares Silver Trust (SLV) has truly taken flight.) -- and revisited twice last week -- the
In the process, the shares have knifed to 52-week highs, rising from a successful test of the 200-day moving average. The rally has been fueled by a sustained volume increase.
Against this backdrop, the SLV is vying Tuesday for a fifth straight close atop the 20-day Bollinger bands (). Put differently, the chart illustrates an unusually bullish two standard deviation July breakout.
As detailed previously, initial support spans from about 15.00 to 15.19, levels matching last week's gap and the January peak. The post-breakout low (15.03) has closely matched support, punctuating a successful initial retest. (Also see the July 2 review ().)
Late last week, the shares knifed to all-time highs, clearing resistance matching the May peak.
Though near-term extended, the strong-volume spike is longer-term bullish, and the shares are attractive on a pullback. Tactically, near-term support (131.70) is followed by the firmer breakout point (129.00).
Initially profiled May 15, Roku, Inc. (ROKU) has returned 30.3% and remains well positioned.
Earlier this month, the shares staged a strong-volume breakout, rising to record territory. The subsequent pullback has been flat, fueled by decreased volume, positioning the shares to build on the initial spike.
Tactically, the breakout point (106.50) is followed by the deeper 50-day moving average (97.30) -- a recent bull-bear inflection point -- and the uptrend is intact barring a violation.
Splunk, Inc. (SPLK) is a well positioned large-cap software vendor.
As illustrated, the shares have rallied to the range top, rising to challenge the record close (139.01).
The prevailing tight range signals muted selling pressure near resistance, laying the groundwork for a potential breakout. Tactically, near-term support (135.90) is followed by the May gap (134.15) and a breakout attempt is in play barring a violation.
Finally, Kansas City Southern Corp. (KSU) is a large-cap railroad operator coming to life.
Late last week, the shares gapped atop the 50-day moving average, rising after the company's strong second-quarter results.
The rally places four-year highs under siege amid increased volume. Tactically, major resistance matches the range top, circa 125.50, and an intermediate-term target projects to the 134 area on follow-through.
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. ()
(MORE TO FOLLOW) Dow Jones Newswires
July 23, 2019 19:09 ET (23:09 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
MW UPDATE: Bull trend intact: S&P 500 sustains -2-
-Michael Ashbaugh; 415-439-6400; AskNewswires@dowjones.com
Company Symbol Date Profiled
Best Buy Co., Inc. BBY July 22
Humana, Inc. HUM July 22
AngloGold Ashanti, Ltd. AU July 22
International Business Machines Corp. IBM July 19
Pegasystems, Inc. PEGA July 19
DexCom, Inc. DXCM July 19
EchoStar Corp. SATS July 18
Agnico Eagle Mines Ltd. AEM July 18
Franco-Nevada Corp. FNV July 18
Pan American Silver Corp. PAAS July 17
Neurocrine Biosciences, Inc. NBIX July 17
American Airlines Group, Inc. AAL July 17
Steel Dynamics, Inc. STLD July 17
Industrial Select Sector SPDR XLI July 16
LivePerson, Inc. LPSN July 16
Analog Devices, Inc. ADI July 16
Xilinx, Inc. XLNX July 16
Texas Instruments, Inc. TXN July 15
Packaging Corp. of America PKG July 15
J.B. Hunt Transport Services, Inc. JBHT July 15
Delta Air Lines, Inc. DAL July 12
Coca-Cola Co. KO July 12
UnitedHealth Group, Inc. UNH July 12
Zendesk, Inc. ZEN July 11
Owens Corning OC July 11
TJX Companies, Inc. TJX July 11
Sarepta Therapeutics, Inc. SRPT July 11
Twitter, Inc. TWTR July 10
Micron Technology, Inc. MU July 10
VanEck Vectors Semiconductor ETF SMH July 9
Keysight Technologies, Inc. KEYS July 9
Stratasys, Ltd. SSYS July 9
United Airlines Holdings, Inc. UAL July 9
iShares MSCI Japan ETF EWJ July 8
Inphi Corp. IPHI July 8
Zscaler, Inc. ZS July 8
Invesco QQQ Trust QQQ July 2
PNC Financial Services Group, Inc. PNC July 1
Teledoc Health, Inc. TDOC July 1
Cummins, Inc. CMI July 1
MSCI, Inc. MSCI July 1
Tesla, Inc TSLA June 28
Whirlpool Corp. WHR June 28
Shake Shack, Inc. SHAK June 28
FMC Corp. FMC June 27
ArQule, Inc. ARQL June 27
SunPower Corp. SPWR June 26
Blueprint Medicines Corp. BPMC June 26
Oracle Corp. ORCL June 25
Williams-Sonoma, Inc. WSM June 25
Sunrun, Inc. RUN June 25
Adobe, Inc. ADBE June 24
Spotify Technology SPOT June 24
HollyFrontier Corp. HFC June 24
SPDR S&P Biotech ETF XBI June 24
Apple, Inc. AAPL June 21
VanEck Vectors Gold Miners ETF GDX June 21
iShares Silver Trust SLV June 20
VeriSign, Inc. VRSN June 20
Aecom ACM June 20
Home Depot, Inc. HD June 19
Lululemon Athletica, Inc. LULU June 19
Sinclair Broadcast Group, Inc. SBGI June 19
Amazon.com, Inc. AMZN June 18
Facebook, Inc. FB June 18
SPDR Gold Shares ETF GLD June 18
Synopsys, Inc. SNPS June 17
Zillow Group, Inc. ZG June 17
Verisk Analytics, Inc. VRSK June 17
Cisco Systems, Inc. CSCO June 14
Medtronic plc MDT June 14
Ross Stores, Inc. ROST June 14
Financial Select Sector SPDR XLF June 13
Kirkland Lake Gold Ltd. KL June 13
Grubhub, Inc. GRUB June 12
Dunkin Brands Group, Inc. DNKN June 12
Ciena Corp. CIEN June 11
Silicon Laboratories, Inc. SLAB June 11
Health Care Select Sector SPDR XLV June 10
Wix.com Ltd. WIX June 10
Ecolab, Inc. ECL June 10
Materials Select Sector SPDR XLB June 7
Brooks Automation, Inc. BRKS June 7
Catalent, Inc. CTLT June 7
Coca-Cola Co. KO June 6
Nasdaq, Inc. NDAQ June 6
Target Corp. TGT June 5
Dollar General Corp. DG June 5
Repligen Corp. RGEN June 5
Avalara, Inc. AVLR May 23
Copa Holdings, S.A. CPA May 21
Open Text Corp. OTEX May 20
Zscaler, Inc. ZS May 17
Aspen Technology, Inc. AZPN May 17
ServiceNow, Inc. NOW May 16
Atlassian Corp. TEAM May 16
SolarEdge Technologies, Inc. SEDG May 16
Roku, Inc. ROKU May 15
Arena Pharmaceuticals, Inc. ARNA May 15
CME Group, Inc. CME May 10
Johnson Controls International JCI May 10
Take-Two Interactive Software, Inc. TTWO May 2
Jacobs Engineering Group, Inc. JEC May 2
JetBlue Airways Corp. JBLU Apr. 30
American Express Co. AXP Apr. 24
MetLife, Inc. MET Apr. 17
Church & Dwight Co., Inc. CHD Mar. 29
Consumer Staples Select Sector SPDR XLP Mar. 28
Travelers Companies, Inc. TRV Mar. 28
Pepsico, Inc. PEP Mar. 27
Shopify, Inc. SHOP Mar. 27
Kimberly-Clark Corp. KMB Mar. 15
iShares U.S. Real Estate ETF IYR Mar. 13
Air Products & Chemicals, Inc. APD Mar. 11
Hilton Worldwide Holdings, Inc. HLT Mar. 6
Costco Wholesale Corp. COST Mar. 6
Marvell Technology Group Ltd. MRVL Mar. 1
Universal Display Corp. OLED Mar. 1
Vulcan Materials Co. VMC Mar. 1
Walmart, Inc. WMT Feb. 22
Microsoft Corp. MSFT Feb. 22
Motorola Solutions, Inc. MSI Feb. 15
First Solar, Inc. FSLR Feb. 15
Mastercard, Inc. MA Feb. 11
Procter & Gamble Co. PG Feb. 8
Global Payments, Inc. GPN Feb. 5
Visa, Inc. V Feb. 4
SPDR S&P Homebuilders ETF XHB Jan. 30
Exact Sciences Corp. EXAS Jan. 28
Applied Materials, Inc. AMAT Jan. 25
SBA Communications Corp. SBAC Jan. 24
Paycom Software, Inc. PAYC Jan. 23
Advanced Micro Devices, Inc. AMD Jan. 22
VeriSign, Inc. VRSN Jan. 18
Coupa Software, Inc. COUP Jan. 16
Veeva Systems, Inc. VEEV Jan. 16
CyberArk Software CYBR Jan. 11
Okta, Inc. OKTA Jan. 9
Tandem Diabetes Care, Inc. TNDM Jan. 9
Alteryx, Inc. AYX Jan. 8
IAC/InterActivecorp IAC Jan. 7
Workday, Inc. WDAY Dec. 10
Starbucks Corp. SBUX Nov. 5
American Tower Corp. AMT Nov. 5
Utilities Select Sector SPDR XLU Oct. 25
McDonald's Corp. MCD Oct. 24
Yum! Brands, Inc. YUM Oct. 18
Twilio, Inc. TWLO May 21
(END) Dow Jones Newswires
July 23, 2019 19:09 ET (23:09 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.