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Nov. 29, 2011, 1:14 p.m. EST
By Michael Ashbaugh, MarketWatch
Editor's Note: This is a free edition of The Technical Indicator, a daily MarketWatch subscriber newsletter. To get this column, including 100 technical stock picks every month, click here .
CINCINNATI (MarketWatch) "” The U.S. markets have rallied respectably from one-month lows.
Nonetheless, each benchmark faces significant resistance at last week's breakdown point, detailed below.
The S&P 500's hourly chart details the past three weeks.
As illustrated, the S&P has reversed sharply from last week's low.
From current levels, initial resistance holds just under the 1,200 mark, and is closely followed by the 50-day moving average (not illustrated), currently 1,205.
Meanwhile, the Dow industrials' near-term backdrop is similar.
Looking ahead, modest resistance holds at the 11,600 mark, and is followed by more significant overhead at its breakdown point, around 11,650.
And the Nasdaq Composite has also broken down.
From current levels, initial resistance holds at 2,540 "” matching the bottom of last week's gap "” and is followed by additional overhead at 2,567.
Widening the view to six months adds perspective.
As illustrated, the Nasdaq has broken into less-charted, "crash" territory.
That's bearish.
On this wider view, a sustained break atop the 2,600 resistance is needed to neutralize last week's breakdown.
Moving to the Dow, its six-month backdrop is similar.
While the index has edged nominally atop its 50-day moving average, significant resistance holds at its breakdown point, around 11,650.
And the S&P 500's wider backdrop is also technically shaky.
As detailed in Monday's review, three inflection points stand out:
Gap resistance at 1,198, better illustrated on the hourly chart.
The 50-day moving average, currently 1,205.
Major resistance around 1,215, matching its breakdown point.
From a technical standpoint, this week's initial rally to resistance "should" draw sellers.
As detailed above, the major U.S. benchmarks have dropped back into the technical muck.
Market bears are on offense.
And for better or worse, the breakdown points remain the areas to track.
The specific levels fall out as follows:
S&P resistance spanning from 1,215 to 1,230.
Nasdaq resistance spanning from 2,590 to 2,600.
Dow resistance around 11,650.
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