Technically speaking, the backdrop for U.S. stocks continues to strengthen amid a generally well received batch of early second-quarter earnings reports.
Consider that the Nasdaq Composite and S&P 500 have extended their July breakouts, rising this week from major support — S&P 2,802 and Nasdaq 7,806, respectively.
Before detailing the U.S. markets’ wider view, the S&P 500’s SPX, +0.53% hourly chart highlights the past two weeks.
As illustrated, the S&P has sustained the July break to five-month highs. Recall that last week’s close (2,801.8) matched major support at the breakout point (2,802).
Conversely, near-term overhead matches the July peak (2,817) and is followed by the bottom of the January gap (2,838).
Similarly, the Dow Jones Industrial Average has sustained a slight breakout.
Tactically, a near-term floor matches the week-to-date low (24,983), slightly under the 25,000 mark.
Conversely, the prevailing range top (25,215) is followed by inflection points at the June closing peak (25,322) and the absolute June peak (25,402).
True to recent form, the Nasdaq Composite remains the strongest major benchmark.
As illustrated, the index has sustained a slight break to record territory, notching eight straight closes above, or matching, the 7,806 breakout point.
Also consider that Monday’s session low (7,776.5) closely matched near-term support.
Widening the view to six months adds perspective.
On this wider view, the Nasdaq has sustained a modest July break to all-time highs.
Tactically, near-term overhead matches the July peak (7,867), an area that is under siege early Tuesday.
More broadly, a near- to intermediate-term target continues to project from the June low to the 8,190 area.
Looking elsewhere, the Dow industrials’ backdrop remains comparably softer.
Still, the index has escaped formerly cluttered territory, reclaiming the 50- and 200-day moving averages, as well as the 2017 peak (24,876) and the April peak (24,859). The sustained July breakout is constructive.
Meanwhile, the S&P 500 has sustained a headline technical breakout.
Put differently, the S&P has absorbed the massive early-February downdraft via an extended, nearly six-month consolidation phase, punctuated by jagged price action.
Time, and price, have contributed to repair the early-year damage.
Collectively, the U.S. benchmarks continue to respond well to the early batch of second-quarter earnings reports.
The Nasdaq Composite has sustained a break to record territory, while the S&P 500 has escaped a formerly jagged range, reaching five-month highs.
Moving to the small-caps, the iShares Russell 2000 ETF is consolidating just under record territory.
The chart illustrates a mini developing cup-and-handle pattern defined by the June and July lows. A near-term target projects to the 174 area on a rally atop the record close (169.97).
Similarly, the S&P MidCap 400 is holding tightly to its range top.
Though the MDY registered a fractional record close last week (365.62) its breakout attempt technically remains underway.
Meanwhile, the SPDR Trust S&P 500 has maintained major support.
The familiar area matches the former range top, broadly spanning from 279.48 to 280.41. (The June and March peaks, respectively.)
Against this backdrop, the S&P 500 is acting well technically.
Consider that support matches the S&P’s former range top, an area broadly spanning from 2,787 to 2,802. Last week’s low (2,789) and close (2,802) matched support.
The sustained breakout, and successful retest of support, are technically constructive.
Conversely, near-term resistance matches the July peak (2,816.8) and is followed by the January gap, spanning from 2,838 to 2,851.
More broadly, the S&P’s prevailing upturn punctuates a cup-and-handle pattern defined by the April and June lows, detailed previously. An intermediate-term target projects to the 2,890 area on follow-through.
Beyond specific levels, the S&P 500 is traversing less-charted territory, and all trends technically point higher based on today’s backdrop.
See also: S&P 500 ventures atop major resistance, slow-motion breakout attempt underway.
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 10-year Treasury note yield TNX, -0.07% has turned higher, rising in sympathy with a Japanese bond yield resurgence.
Reports that the Bank of Japan may signal a hawkish-leaning policy shift at its meeting next week sent the 10-year Japanese bond yield from 0.03% to as high as 0.09% on Monday, its biggest one-day rise in nearly two years.
Against this backdrop, the 10-year U.S. Treasury note yield has knifed to about 2.95%.
Technically, the upturn punctuates a successful test of the range bottom (2.80). The July low (2.81) matched this area.
Conversely, the former range top (2.94) remains an inflection point and is closely followed by the June peak (3.01).
More broadly, the yield is digesting its steep early-year breakout — and subsequent rise to seven-year highs — illustrated on the weekly chart. Its longer-term technical bias points higher barring a violation of the 2.62 area, a level matching the 2016 and 2017 peaks.
Meanwhile, the Japanese yen has turned higher, also rising amid reports that a hawkish-leaning Bank of Japan policy shift may be pending.
In the process, the Invesco CurrencyShares Japanese Yen ETF FXY, +0.10% has reached a headline technical test.
Consider that the breakdown point (86.10) marks significant resistance, an area closely followed by the four-month downtrend. A sustained break higher would place the brakes on bearish momentum, likely signaling an intermediate-term trend shift.
The yen’s response to next week’s Bank of Japan policy meeting should add color.
Moving to U.S. sectors, the Financial Select Sector SPDR XLF, +0.72% has sustained the breakout initially flagged last week.
Specifically, the group has cleared trendline resistance, as well as the 50- and 200-day moving averages, raising the flag to a trend shift.
Additional overhead matches the June peak (28.27). An eventual close higher would mark a “higher high” confirming the trend shift.
More broadly, the group’s resurgence strengthens the U.S. sub-sector backdrop, and by extension, the broad-market bull case.
Profiled last week, Bank of America Corp. BAC, +0.50% has extended the July breakout. (Yield = 1.6%.)
This week’s rally punctuates a successful test of trendline support (29.50), nearly to the decimal. The prevailing rally attempt remains intact barring a violation of this area.
Conversely, additional overhead closely matches a four month range top and the bottom of the mid-March gap (31.50).
Finally, Northern Trust Corp. NTRS, +1.13% is a well positioned large-cap regional bank. (Yield = 1.6%.)
As illustrated, the shares have recently gapped sharply higher, rising amid a volume spike after the company’s second-quarter results.
The range top matches record territory, circa 111, and recent muted selling pressure near resistance positions the shares for a potential breakout. An intermediate-term target projects to the 120 area on follow-through.
Northern Trust is also well positioned on the three-year chart.
The table below includes names recently profiled in The Technical Indicator that remain well positioned. For the original comments, see The Technical Indicator Library.
|Stanley Black & Decker, Inc.||SWK||July 23|
|SS&C Technologies Holdings, Inc.||SSNC||July 23|
|Arconic, Inc.||ARNC||July 23|
|Taiwan Semiconductor Manufacturing Co.||TSM||July 20|
|Take-Two Interactive Software, Inc.||TTWO||July 20|
|Bank of America Corp.||BAC||July 20|
|JPMorgan Chase and Co.||JPM||July 19|
|Activision Blizzard, Inc.||ATVI||July 19|
|Cummins, Inc.||CMI||July 19|
|U.S. Steel Corp.||X||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|
|Transocean, Ltd.||RIG||July 11|
|G-III Apparel Group, Ltd.||GIII||July 11|
|Coca-Cola Co.||KO||July 10|
|3M Co.||MMM||July 10|
|NetEase, Inc.||NTES||July 9|
|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|
|Diamond Offshore Drilling, Inc.||DO||July 2|
|Oceaneering International, Inc.||OII||June 29|
|PTC, Inc.||PTC||June 29|
|NII Holdings, Inc.||NIHD||June 29|
|Cirrus Logic, Inc.||CRUS||June 27|
|BioMarin Pharmaceutical, Inc.||BMRN||June 27|
|Canada Goose Holdings, Inc.||GOOS||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|
|Lands’ End, Inc.||LE||June 21|
|Merck & Co., Inc.||MRK||June 21|
|Williams-Sonoma, Inc.||WSM||June 20|
|Spark Therapeutics, Inc.||ONCE||June 20|
|Vishay Intertechnology, Inc.||VSH||June 18|
|Dillard’s, Inc.||DDS||June 18|
|Alphabet, Inc.||GOOGL||June 15|
|Pepsico, Inc.||PEP||June 14|
|Glu Mobile, Inc.||GLUU||June 14|
|Mosaic Co.||MOS||June 13|
|Consumer Staples Select Sector SPDR||XLP||June 13|
|Roku, Inc.||ROKU||June 12|
|Analog Devices, Inc.||ADI||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|
|Twitter, Inc.||TWTR||June 5|
|Kohl’s Corp.||KSS||June 5|
|Immunomedics, Inc.||IMMU||May 24|
|Supernus Pharmaceuticals, Inc.||SUPN||May 23|
|Electronic Arts, Inc.||EA||May 22|
|Momo, Inc.||MOMO||May 22|
|Union Pacific Corp.||UNP||May 21|
|Twilio, Inc.||TWLO||May 21|
|Intercept Pharmaceuticals, Inc.||ICPT||May 21|
|Energy Select Sector SDPR||XLE||May 18|
|Range Resources Corp.||RRC||May 17|
|SPDR S&P Metals & Mining ETF||XME||May 17|
|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|
|Facebook, Inc.||FB||May 9|
|Electronics for Imaging, Inc.||EFII||May 9|
|SPDR S&P Oil and Gas Exploration & Production ETF||XOP||May 9|
|Coupa Software, Inc.||COUP||May 8|
|Apple, Inc.||AAPL||May 7|
|PDC Energy, Inc.||PDCE||May 7|
|Under Armour, Inc.||UA||May 2|
|Norfolk Southern Corp.||NSC||May 2|
|Advanced Micro Devices, Inc.||AMD||May 1|
|UnitedHealth Group, Inc.||UNH||Apr. 30|
|Nike, Inc.||NKE||Apr. 30|
|DSW, Inc.||DSW||Apr. 30|
|Home Depot, Inc.||HD||Apr. 27|
|Noble Energy, Inc.||NBL||Apr. 27|
|Costco Wholesale Corp.||COST||Apr. 26|
|CSX Corp.||CSX||Apr. 26|
|Wingstop, Inc.||WING||Apr. 19|
|EOG Resources, Inc.||EOG||Apr. 11|
|Autodesk, Inc.||ADSK||Apr. 10|
|NetApp, Inc.||NTAP||Apr. 9|
|Domino’s Pizza, Inc.||DPZ||Mar. 21|
|Veeva Systems, Inc.||VEEV||Mar. 15|
|Burlington Stores, Inc.||BURL||Mar. 14|
|Baozun, Inc.||BZUN||Mar. 9|
|AxoGen, Inc.||AXGN||Mar. 8|
|TJX Companies, Inc.||TJX||Mar. 6|
|Chart Industries, Inc.||GTLS||Mar. 6|
|Macy’s, Inc.||M||Mar. 5|
|Five9, Inc.||FIVN||Mar. 5|
|LivePerson, Inc.||LPSN||Feb. 28|
|VeriSign, Inc.||VRSN||Feb. 26|
|Shutterfly, Inc.||SFLY||Feb. 22|
|ServiceNow, Inc.||NOW||Feb. 21|
|Palo Alto Networks, Inc.||PANW||Feb. 16|
|Adobe Systems, Inc.||ADBE||Feb. 16|
|Salesforce.com, Inc.||CRM||Feb. 12|
|Fortinet, Inc.||FTNT||Jan 19|
|Arrowhead Pharmaceuticals Corp.||ARWR||Jan. 11|
|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|
|XPO Logistics, Inc.||XPO||Oct. 2|
|Nvidia Corp.||NVDA||Sept. 27|
|Bottomline Technologies, Inc.||EPAY||July 13|
|GrubHub, Inc.||GRUB||May 4|
|Square, Inc.||SQ||Mar. 3|
|Netflix, Inc.||NFLX||Oct. 4|
|Microsoft Corp.||MSFT||Aug. 5|
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