Thursday, February 25, 2016

CHARTING THE MARKET............

CHARTING THE MARKET

Broadly speaking, significant technical tests are underway this week. This applies to the major U.S. benchmarks, and influential sectors. The U.S. markets' longer-term technical bias remains bearish.

Technically speaking, the S&P 500 has balked at its second test of significant resistance. The S&P 500 has rallied from two-year lows, reaching a significant technical test.

Beyond technical tests, the 2016 downdraft has inflicted broadly-based damage, and the S&P 500's longer-term backdrop supports a bearish view. The next several sessions, and the February close, should add color to the immediate outlook.

The specific area matches its breakdown range top — S&P 1,950 — a level that remains an important bull-bear battleground. Against this backdrop, the S&P 500's longer-term technical bias remains bearish. The index hasn't closed atop its 50-day moving average since Dec. 29.

Significant resistance rests at 1,950, closely matching the 50-day moving average, currently 1,949.5. Near-term support rests at 1,927, and is followed by the 10% correction mark of 1,917, matching last week's close.






The Dow Jones Industrial Average has reached six-week highs, closing Monday slightly atop major resistance just under the 16,600 mark.

With Tuesday's early downturn, initial support holds around 16,460, and is followed by a deeper floor just above 16,200. Ssignificant resistance rests at its range top, closely matching the 50-day moving average, currently 16,633. The Dow closed Monday at 16,620 — just under the 50-day — and its response to resistance, over the next several sessions, should be a useful bull-bear gauge. 




The Nasdaq Composite has support at 4,548, and is followed by a more significant floor at 4,517. The Nasdaq is the weakest major U.S. benchmark. It's positioned firmly under the 50-day moving average, and the February peak. Its first notable support matches the former breakdown point, around 4,517. More broadly, the Nasdaq's longer-term technical bias remains bearish.





The Big Picture














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