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Charting market cross currents, S&P 500 violates the breakout point

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Technically speaking, a previously tame October pullback accelerated to start this week, inflicting damage in spots.

Against this backdrop, the S&P 500 and Nasdaq Composite remain relatively resilient, though key technical tests are in play, and the bigger-picture technicals are not one-size-fits-all.

Before detailing the U.S. markets’ wider view, the S&P 500’s
SPX,
-0.12%

 hourly chart highlights the past two weeks.

As illustrated, the S&P has extended its October downturn, violating the breakout point (3,428).

The downturn places the 50-day moving average, currently 3,408, firmly under siege. Tuesday’s early session high (3,407.9) has matched the 50-day amid an extended retest.

Delving slightly deeper, the February peak (3,393) marks a familiar inflection point.

Meanwhile, the Dow Jones Industrial Average
DJIA,
-0.53%

 has drawn more aggressive selling pressure.

In its case, the blue-chip benchmark has placed distance firmly under its 50-day moving average, currently 28,012.

The prevailing downturn punctuates a failed test of major resistance, circa 28,400, an area also detailed on the daily chart. Bearish price action.

Against this backdrop, the Nasdaq Composite
COMP,
+0.58%

remains stronger than the other benchmarks, narrowly holding its 50-day moving average, currently 11,317.

Still, the index has violated its first notable support — the 11,448-to-11,460 area — an inflection point also detailed below.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has extended its late-October downturn.

In the process, the index has violated its first notable support (11,460) an area closely matching the October gap and its former projected target.

On further weakness, the 50-day moving average, currently 11,317, is followed by the breakout point (11,245). An eventual violation of these areas would raise a caution flag.

Delving deeper, likely last-ditch support matches the October low (11,033), the level from which the early-month rally originates. The Nasdaq’s intermediate-term bullish bias gets the benefit of the doubt barring a violation.

Looking elsewhere, the Dow industrials’ backdrop remains softer than the other benchmarks.

Consider that its prevailing downturn originates from resistance closely matching its former range top (28,400). (The S&P and Nasdaq violated their corresponding levels just Monday.)

More immediately, the index has violated its 50-day moving average, exhibiting relative weakness versus the other benchmarks. Monday’s 650-point single-session plunge marked the Dow’s worst day since early September.

Tactically, recall that the 50-day moving average (in blue) underpinned the May, June and late-July lows.

So viewed in isolation, the Dow’s aggressive downdraft under the 50-day raises an intermediate-term caution flag.

Meanwhile, the S&P 500 remains relatively stronger than the Dow industrials.

Still, Monday’s downturn inflicted the first notable damage in weeks.

Specifically, the S&P has violated its breakout point (3,428), pulling in to an extended test of the 50-day moving average, currently 3,408.

The bigger picture

Collectively, a previously tame October pullback has started to inflict technical damage in spots.

Amid the cross currents, the prevailing bigger-picture backdrop is not one-size-fits-all.

On a headline basis, the Dow Jones Industrial Average has violated its 50-day moving average, the Nasdaq Composite has maintained its 50-day, and the S&P 500 has split the difference, gravitating to its 50-day moving average.

To be sure, the prevailing backdrop does not hinge on the 50-day moving average — or any single variable — though the trending indicator in this case exemplifies a market divergence. The major benchmarks are doing slightly different things.

Moving to the small-caps, the iShares Russell 2000 ETF is digesting a rally to eight-month highs.

Tactically, notable support broadly spans from about 158.80 to 159.80, levels closely matching the post-breakout low and the breakout point.

An extended retest is underway amid this week’s increased volume.

Similarly, the SPDR S&P MidCap 400 ETF has sustained a break to eight-month highs.

In its case, notable support broadly spans from about 356.40 to 360.20.

Combined, the small- and mid-cap benchmarks are acting well technically — based on today’s backdrop — though a violation of the breakout points would raise a question mark.

Looking elsewhere, the SPDR Trust S&P 500
SPY,
-0.16%

 has extended its October downturn amid increased volume.

In the process, the SPY has edged under its 50-day moving average, currently 340.25.

Tactically, major support matches the February peaks — the 338.34-to-339.08 area — levels formerly defining the SPY’s record highs.

Placing a finer point on the S&P 500, the index has violated major support (3,428), a familiar inflection point detailed repeatedly.

This area effectively underpinned last week’s price action. The pending retest from underneath should be a useful bull-bear gauge.

More immediately, an extended test of the S&P’s 50-day moving average, currently 3,408, remains underway. To reiterate, Tuesday’s early session high (3,407.9) has matched the 50-day.

On further weakness, the former breakout point (3,393) rests nearby, a level matching the February peak.

Delving deeper, likely last-ditch support (3,328) matches the late-September gap — also the early-2020 breakout point — an area from which the steep early-October rally originates.

As always, it’s not just what the benchmarks do, it’s how they do it. But generally speaking, the S&P 500’s intermediate-term bias remains bullish barring a violation of the 3,328 area.

Also see: Charting a successful technical test, S&P 500 nails the breakout point.

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 SPDR S&P Retail ETF
XRT,
-0.02%

 is acting well technically. (Yield = 1.2%.)

The group started October with a strong-volume rally, rising to tag record highs.

By comparison, the subsequent pullback has been flat, likely positioning the group to extend its uptrend.

Tactically, the breakout point (53.30) is followed by the 50-day moving average, currently 51.98. Delving slightly deeper, an inflection point matches the early-October gap and the late-September range top (51.60). A posture higher signals a bullish bias.

More broadly, the group remains well positioned on the three-year chart, rising from a continuation pattern hinged to the massive early-2020 V-shaped reversal.

Meanwhile, the SPDR S&P Regional Banking ETF — profiled Monday — continues to act well technically. (Yield = 3.4%.)

As illustrated, the group has knifed atop its 200-day moving average, rising to briefly tag four-month highs. The strong-volume rally punctuates a double bottom defined by the July and September lows.

Underlying the upturn, the group’s relative strength index (not illustrated) has also registered four-month highs, improving the chances of more decisive follow-through.

Tactically, the 200-day moving average, currently 40.22, closely matches the group’s former range top. A breakout attempt is in play barring a violation.

Moving to specific names, Logitech International S.A.
LOGI,
+1.75%

 is a large-cap Switzerland-based manufacturer of computer peripherals.

Earlier this month, the shares gapped to all-time highs, rising sharply after the company’s second-quarter results. The ensuing pullback has been fueled by decreased volume, placing the shares 11.5% under the October peak.

Tactically, the breakout point (81.20) closely matches the bottom of the gap. A sustained posture higher signals a firmly-bullish bias.

Initially profiled Sept. 23 — amid the rally atop trendline resistance — Datadog, Inc.
DDOG,
+1.98%

 has added 6.8% and remains well positioned.

The shares concluded September with a strong-volume spike, ultimately reaching record territory.

More immediately, the prevailing pullback has been fueled by decreased volume, placing the shares near the breakout point (98.00) and 18.4% under the October peak.

Delving deeper, the ascending 50- and 100-day moving averages have marked inflection points. The prevailing uptrend is intact barring a violation.

Dentsply Sirona, Inc.
XRAY,
-0.31%

 is a large-cap developer of dental products and related technologies.

Technically, the shares have recently knifed atop trendline resistance, rising after an analyst upgrade. The subsequent pullback has been comparably flat, fueled by decreased volume, positioning the shares to build on the initial breakout.

Tactically, the trendline pivots to support, and is closely followed by the 200-day moving average, currently 45.30. The prevailing recovery attempt is intact barring a violation.

Also notice the pending golden cross — or bullish 50-day/200-day moving average crossover — signaling that the intermediate-term uptrend has overtaken the longer-term trend.

Initially profiled Aug. 24, Expedia Group, Inc.
EXPE,
-4.46%

 has edged slightly higher and remains well positioned.

As illustrated, the shares have rallied to the range top, rising to challenge eight-month highs.

The strong-volume upturn punctuates an extended test of trendline support. Tactically, a near-term floor matches the former range top (97.30). A breakout attempt is in play barring a violation.

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.

Company

Symbol* (Click symbol for chart.)

Date Profiled

JetBlue Airways Corp.

JBLU

Oct. 26

GameStop Corp.

GME

Oct. 26

SPDR S&P Regional Banking ETF

KRE

Oct. 26

Maxim Integrated Products, Inc.

MXIM

Oct. 21

Alexion Pharmaceuticals, Inc.

ALXN

Oct. 21

Jazz Pharmaceuticals, plc

JAZZ

Oct. 21

The Travelers Companies, Inc.

TRV

Oct. 21

Micron Technology, Inc.

MU

Oct. 20

Chegg, Inc.

CHGG

Oct. 20

Gogo, Inc.

GOGO

Oct. 20

Atlassian Corp.

TEAM

Oct. 19

Vulcan Materials Co.

VMC

Oct. 19

Utilities Select Sector SPDR

XLU

Oct. 19

Northern Trust Co.

NTRS

Oct. 16

XPO Logistics, Inc.

XPO

Oct. 16

ON Semiconductor Corp.

ON

Oct. 16

Ford Motor Co.

F

Oct. 15

Texas Instruments, Inc.

TXN

Oct. 15

Skyworks Solutions, Inc.

SWKS

Oct. 14

Amazon.com, Inc.

AMZN

Oct. 13

First Solar, Inc.

FSLR

Oct. 13

Nevro Corp.

NVRO

Oct. 12

Teradyne, Inc.

TER

Oct. 12

SPDR S&P Homebuilders ETF

XHB

Oct. 9

Broadcom, Inc.

AVGO

Oct. 9

STMicroelectronics N.V.

STM

Oct. 9

Shake Shack, Inc.

SHAK

Oct. 9

SPDR S&P Biotech ETF

XBI

Oct. 8

Alexion Pharmaceuticals, Inc.

ALXN

Oct. 8

Twilio, Inc.

TWLO

Oct. 8

Cloudflare, Inc.

NET

Oct. 7

Ceridian HCM Holding, Inc.

CDAY

Oct. 7

Guess, Inc.

GES

Oct. 7

Gap, Inc.

GPS

Oct. 6

Motorola Solutions, Inc.

MSI

Oct. 6

Sunnova Energy International, Inc.

NOVA

Oct. 6

Marvell Technology Group,Ltd.

MRVL

Oct. 5

Qorvo, Inc.

QRVO

Oct. 2

NCR Corp.

NCR

Oct. 2

LGI Homes, Inc.

LGIH

Oct. 2

SailPoint Technology Holdings, Inc.

SAIL

Oct. 1

Martin Marietta Materials, Inc.

MLM

Sept. 30

Whirlpool Corp.

WHR

Sept. 29

Abercrombie & Fitch Co.

ANF

Sept. 29

American Eagle Outfitters

AEO

Sept. 28

Twitter, Inc.

TWTR

Sept. 28

Blueprint Medicines Co.

BPMC

Sept. 28

Zendesk, Inc.

ZEN

Sept. 23

Datadog, Inc.

DDOG

Sept. 23

Scientific Games Corp.

SGMS

Sept. 23

Maxar Technologies, Inc.

MAXR

Sept. 18

V.F. Corp.

VFC

Sept. 14

Crocs, Inc.

CROX

Sept. 14

Five Below, Inc.

FIVE

Sept. 10

Dow Inc.

DOW

Sept. 10

Eastman Chemical Co.

EMN

Sept. 10

CrowdStrike Holdings, Inc.

CRWD

Sept. 9

International Paper Co.

IP

Sept. 3

Anaplan, Inc.

PLAN

Sept. 2

Beyond Meat, Inc.

BYND

Sept. 1

Medtronic

MDT

Aug. 28

Celanese Corp.

CE

Aug. 26

Norfolk Southern Corp.

NSC

Aug. 25

Westlake Chemical Corp.

WLK

Aug. 25

Deere & Co.

DE

Aug. 24

Expedia Group, Inc.

EXPE

Aug. 24

Johnson Controls International

JCI

Aug. 21

Adobe, Inc.

ADBE

Aug. 20

Canadian Solar, Inc.

CSIQ

Aug. 20

General Motors Co.

GM

Aug. 20

Starbucks Corp.

SBUX

Aug. 18

Builders FirstSource, Inc.

BLDR

Aug. 18

Steel Dynamics, Inc.

STLD

Aug. 17

Elanco Animal Health, Inc.

ELAN

Aug. 17

Brinker International, Inc.

EAT

Aug. 13

Enphase Energy, Inc.

ENPH

Aug. 13

Nike, Inc.

NKE

Aug. 11

Nucor Corp.

NUE

Aug. 11

Freeport McMoRan, Inc.

FCX

Aug. 10

Natera, Inc.

NTRA

Aug. 10

McDonald’s Corp.

MCD

Aug. 7

Industrial Select Sector SPDR

XLI

Aug. 6

Sunrun, Inc.

RUN

Aug. 5

Penn National Gaming, Inc.

PENN

July 30

Procter & Gamble Co.

PG

July 29

SPDR S&P Metals & Mining ETF

XME

July 28

iShares MSCI South Korea ETF

EWY

July 28

Advanced Micro Devices, Inc.

AMD

July 23

Best Buy Co., Inc.

BBY

July 22

Materials Select Sector SPDR

XLB

July 20

Caterpillar, Inc.

CAT

July 20

Progressive Corp.

PGR

July 17

Livongo Health, Inc.

LVGO

July 17

Roku, Inc.

ROKU

July 16

Cognizant Technology Solutions, Inc.

CTSH

July 16

Consumer Staples Select Sector SPDR

XLP

July 15

Home Depot, Inc.

HD

July 15

Costco Wholesale Corp.

COST

July 15

Consumer Discretionary Select Sector SPDR

XLY

July 13

SunPower Corp.

SPWR

July 13

Walmart, Inc.

WMT

July 8

Big Lots, Inc.

BIG

July 1

Tandem Diabetes Care, Inc.

TNDM

July 1

Danaher Corp.

DHR

June 24

RH

RH

June 24

Lowe’s Companies

LOW

June 19

Fiverr International, Ltd.

FVRR

June 19

Etsy, Inc.

ETSY

June 17

HubSpot, Inc.

HUBS

June 8

Square, Inc.

SQ

June 8

United Parcel Service, Inc.

UPS

June 5

FedEx Corp.

FDX

June 3

SPDR S&P Retail ETF

XRT

June 3

iShares MSCI Japan ETF

EWJ

May 29

SolarEdge Technologies, Inc.

SEDG

May 29

Synopsis, Inc.

SNPS

May 27

Agilent Technologies, Inc.

A

May 15

Qualcomm, Inc.

QCOM

May 12

Salesforce.com, Inc.

CRM

May 8

Facebook, Inc.

FB

May 7

Spotify Technology S.A.

SPOT

May 5

Dollar General Corp.

DG

Apr. 28

ServiceNow, Inc.

NOW

Apr. 27

Five9, Inc.

FIVN

Apr. 24

Chewy, Inc.

CHWY

Apr. 24

Tesla, Inc.

TSLA

Apr. 23

VanEck Vectors Semiconductor ETF

SMH

Apr. 17

Veeva Systems, Inc.

VEEV

Apr. 17

Okta, Inc.

OKTA

Apr. 16

Target Corp.

TGT

Apr. 16

Invesco QQQ Trust

QQQ

Apr. 14

DocuSign, Inc.

DOCU

Apr. 3

Zscaler, Inc.

ZS

Apr. 3

Apple, Inc.

AAPL

Mar. 27

Nvidia Corp.

NVDA

Mar. 27

Zoom Video Communications, Inc.

ZM

Mar. 19

iShares MSCI Emerging Markets ETF

EEM

Mar. 19

SPDR Gold Shares ETF

GLD

Jan. 2

Microsoft Corp.

MSFT

Feb. 22

* Click each symbol for current chart.



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‘I could live on my Social Security and still save money’: This 66-year-old left Chicago for ‘calming’ Costa Rica — where he now plans to live indefinitely

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Editor’s note: This article was first published in September 2019.

A school break changed 66-year-old Martin Farber’s life forever.

In 2007, his daughter — who at the time was attending Illinois State University — decided she wanted to spend a college holiday volunteering in Costa Rica and staying with a local family, he explains. She came home raving about the experience, so, in 2008, Farber — who at the time was living in Evanston, Ill., just outside Chicago, and selling cars — took his first trip there.

“It was a big surprise to me — bumpy roads, dogs barking in the streets,” he says. “I wasn’t enamored at first.”

But as his daughter began traveling there more and eventually moved there for a year, he took additional trips to Costa Rica. It quickly grew on him — in particular, the people. “The Costa Rican people are warm, open and friendly. I felt less invisible in a strange country in a strange town where I didn’t speak the language than I did in Evanston.”

And the more time he spent there, the more it impacted him: “On one of my trips there, I thought: My daughter’s life makes more sense than mine,” he says. “There was nothing wrong with my life, but I felt that my life was out of context with who I’d become. … I would have bills and make money to pay them, but that had ceased to be satisfying,” he recalls. “I knew I needed to change my life — there was no more joy in what I was doing.”

What’s more, when he’d return from his Costa Rica trips, people noticed. “I would come back, and my friends and therapist would say: You seem better after you go,” he says with a laugh.

A view from the hot springs near Martin Farber’s home in Costa Rica.


Martin Farber

So in 2014, he packed up and moved to Orosi — a picturesque, lush small town with waterfalls and hot springs a little over an hour’s drive from San Jose — promising himself he’d stay for two years. It’s been five, and he now plans to stay in Costa Rica indefinitely. (Though Farber notes that, to him, “it’s not a retirement; it’s a chance to lead a new and different life.”)

Here’s what his life is like, from costs to health care to residency to everyday life:

The cost: While many expats spend way more living in Costa Rica, Farber says: “I could live on my Social Security and still save money.” He says “a person can live on $1,200 per month, two people on $2,000.” The key, he says, is to live more like he does and as the Costa Ricans do — in a modest home, eating local food and purchasing local goods.

Indeed, Farber himself spends just $300 a month for rent (he rents a home from a friend who moved recently and gave him a good deal), roughly $225 a month on groceries and just $50 a month total on water and electricity (the temperate climate in Orosi means you rarely need heat or air conditioning). The veteran Volkswagen
VOW,
+0.96%

 
VLKAF,
+0.98%

salesman saves money by not owning a car (those over 65 ride municipal buses for free), which can be a significant expense in Costa Rica; for his cellphone, “I pay as I go … roughly $10 may last me a couple weeks or more,” he says, adding that “many people handle there their cellphones this way. You can get them recharged anywhere.”

His major expense is travel: He goes back to the U.S. to visit his mother in Florida several times a year and lately has spent part of the summer in Chicago helping out a friend with a dealership there. He also spends a good amount of money on health care. He says that while flights can be had for as little as $350 roundtrip during offseasons, the cost can be much higher the rest of the year.

In the saddle.


Martin Farber

Health care: Farber, who has permanent resident status in Costa Rica, says he pays about $90 per month to participate in the country’s health-care system — adding that the health care he’s received has been very good. (A 2018 study of health-care quality and access in more than 190 nations ranked Costa Rica No. 62.)

When he developed a detached retina, though, he paid for the procedure out of pocket so that he didn’t have to wait for the required surgery, he says — adding that the entire procedure cost him about $5,000. “I would have had to have waited four days,” he says, if he had not paid to expedite matters. “That might have been fine, but it might not.” And he adds that the quality of care depends on where you get it in the country.

Lifestyle: Though Farber says that he “moved here with no goals and no agenda,” he’s found plenty to do. “I take Spanish lessons two days a week for two hours a day. It’s been great. I never thought I would acquire a usable language in my 60s,” he says. He also rides his bike all around the area, does some writing and belongs to a community group that undertakes projects to improve the area.

And he often simply takes in nature, which he says has been an essential part of why he feels calmer and more relaxed in Costa Rica than in the U.S. “I live at 3,000 feet but in a valley surrounded by coffee fields and lime trees and water. At night, if I open the windows, I can hear the river rushing by,” he says. “It is very calming … hundreds of trees everywhere … you know the Earth is alive.”

The historic Iglesia de San José de Orosi.


iStock

Cons: “I don’t want to overglorify. It’s not without its problems,” Farber says of Costa Rica. “There are social problems and downsides.” He notes that crime and petty theft can be a problem (“I am cautious,” he says of his approach) and seem to have increased since he moved there, and adds that he misses out on some cultural things because of where he lives. And, he says with a laugh, “I can’t order Thai food at 9 at night.” But, he adds: “These are trade-offs — in the afternoon, I get to walk in the coffee fields and see flocks of parrots.”

Residency: To qualify for Costa Rica’s pensionado visa, expats must prove that they have a pension of at least $1,000 coming in each month. (Here are the details of that program.) Once you have lived in Costa Rica for three years, you can apply for permanent residency. Farber used a lawyer to help him figure out the ins and outs of residency options; his entire path to permanent residency took about a year, he says.

The bottom line: “After five years I am still amazed and surprised that I made the decision to lead a life I never thought I would,” he says. And while he may not stay in Orosi forever — “the town doesn’t have an ambulance, [and] I don’t know what it will be like to be 80 there,” he says — he does plan to stay in Costa Rica in no small part because of the people and sense of community. “I have the feeling that life is good here,” he says. “It’s hard sometimes, but we are all in it together.”



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