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Charting a slow-motion breakout: S&P 500 challenges 3,700 mark



Technically speaking, the U.S. benchmarks continue to trend higher, rising amid rotational price action, and persistent late-year strength.

Against this backdrop, the S&P 500 has rallied to press its latest round-number milestone — the 3,700 mark — while the Nasdaq Composite vies to extend a more aggressive break to all-time highs.

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 sustained its latest modest break to record territory.

Tactically, the December peak (3,699.20) has thus far registered less than one point under the 3,700 mark.

Conversely, the former range top (3,682) is followed by firmer support matching the November peak (3,646).

Meanwhile, the Dow Jones Industrial Average
 has pulled in modestly from its latest record high.

Still, the index has maintained its former breakout point (29,964) an area also detailed on the daily chart.

Tuesday’s early session low (29,972) has registered slightly above support.

Separately, Monday’s close punctuated the Dow’s first consecutive closes atop the 30,000 mark. (Monday also marked just the third-ever close atop the 30,000 mark.)

Against this backdrop, the Nasdaq Composite
continues to tag all-time highs.

The prevailing upturn punctuates last week’s successful test of support matching the November peak (12,244).

Also recall that the Nasdaq has trended atop its 20-hour moving average, the hallmark of a strong near-term uptrend.

Widening the view to six months adds perspective.

On this wider view, the Nasdaq has extended a decisive 3.8% technical breakout. Consider that six of the prior eight closes have marked all-time closing highs.

Though near-term extended — and due a cooling-off period — the aggressive breakout confirms the primary uptrend.

Tactically, the November peak (12,244) is followed by the firmer breakout point (12,074).

Looking elsewhere, the Dow Jones Industrial Average broken less decisively to record highs.

The prevailing upturn punctuates a jagged test of the November range top. A near-term target continues to project to the 30,700 mark, about 2.1% above current levels.

Conversely, a near-term floor matches the former breakout point (29,964), an area also detailed on the hourly chart. Tuesday’s early session low (29,972) has registered slightly above support.

Meanwhile, the S&P 500 has sustained a respectable breakout.

To reiterate, the December peak (3,699.20) has thus far registered less than one point from the 3,700 mark.

Conversely, gap support almost precisely matches the breakout point (3,646), detailed previously.

The bigger picture

As detailed above, the major U.S. benchmarks are acting well technically.

On a headline basis, the S&P 500 and Nasdaq Composite have extended their initial Dec. 1 breaks to record territory (last Tuesday), rising amid still muted selling pressure.

Meanwhile, the Dow Jones Industrial Average has broken out less aggressively, rising atop the 30,000 mark amid recent catch-up price action.

Moving to the small-caps, the iShares Russell 2000 ETF has extended its late-year rally to record territory.

The bull-flag breakout punctuates a tight seven-session range.

Similarly, the SPDR S&P MidCap 400 ETF has extended its uptrend.

Here again, the breakout punctuates a seven-session flag pattern hinged to the steep November rally.

Looking elsewhere, the SPDR Trust S&P 500
 has extended an early-month breakout.

The December follow-through punctuates a bullish continuation pattern hinged to a familiar double bottom, defined by the September and October lows.

Placing a finer point on the S&P 500, the index is rising amid orderly price action.

Recall that the top of last week’s gap (3,645.87) almost precisely matched the November peak (3,645.99), detailed previously.

The post-breakout low (3,645, Wednesday) registered within about one point of support.

Delving deeper, the prevailing breakout originates from last week’s low (3,594) matching gap support (3,594).

More broadly, the S&P has sustained its December breakout. Recent grinding-higher price action punctuates a continuation pattern hinged to the double bottom defined by the September and October lows.

Tactically, the breakout point (3,646) is followed by a deeper floor in the 3,588-to-3,594 area, levels matching the September peak and last week’s gap.

Delving deeper, the October peak (3,550) is followed by the ascending 50-day moving average, currently 3,499.

Beyond technical levels, the S&P 500’s intermediate-term path of least resistance continues to point higher, based on today’s backdrop, pending signs of a bearish pulse. Late-year selling pressure remains conspicuously flat.

Also see: Market rotation persists: Nasdaq takes flight to record highs.

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 has taken flight.

Specifically, the group has knifed to record territory, placing distance atop former resistance matching the October peak. The initial upturn marked a bullish two standard deviation breakout, encompassing consecutive closes atop the 20-day Bollinger bands.

Though still near-term extended, and due to consolidate, the steep late-year rally likely lays the groundwork for longer-term follow-through.

More broadly, the prevailing breakout punctuates a prolonged five-year range, illustrated on the one-decade chart. As always, the longer the base, the higher the space.

Initially profiled March 27, Apple, Inc.
 has returned 91.5% and remains well positioned.

The shares started December with a breakout, clearing trendline resistance after a pair of bullish analyst notes.

The strong-volume upturn punctuates a successful test of the 100-day moving average, a level defining the November lows.

On further strength, the October peak (125.40) remains an overhead inflection point. Follow-through higher would resolve a modified double bottom — defined by the September and November lows — likely opening the path to a retest of the record high.

Conversely, the 100-day moving average, currently 114.80, is followed by the late-November low (112.60) and slightly deeper gap support (112.35). A sustained posture higher signals a bullish bias.

F5 Networks, Inc.
 is a well positioned large-cap networking software name.

The shares initially spiked four weeks ago, rising after an activist investor disclosed a less than 5% stake in the company, and management announced a $1 billion share buyback program. (The strong-volume spike coincided with the Nov. 9 vaccine-fueled broad-market rally.)

The ensuing pullback has been underpinned by the breakout point, and punctuated by a nominal 19-month high. A near-term target projects to the 178 area on follow-through.

Initially profiled Oct. 1, SailPoint Technologies Holdings, Inc.
 has edged slightly higher and remains well positioned.

The shares initially spiked about two months ago, rising after the announcement that the company has been added to the S&P MidCap 400 Index.

More immediately, the December upturn places record highs under siege. An intermediate-term target projects to the 57 area on a break from the range top (48.50).

Separately, the shares are well positioned on the three-year chart, rising from a continuation pattern hinged to the steep mid-2020 rally.

Emerson Electric Co.
 is a well positioned large-cap diversified industrial name. (Yield = 2.5%.)

As illustrated, the shares have sustained the November breakout, rising to challenge record territory. The December upturn punctuates a successful test of the range bottom (74.50). A near-term projects to the 86 area on follow-through.

More broadly, the shares are well positioned on the four-year chart, challenging major resistance matching the 2018 peak (79.70). The prevailing upturn punctuates a massive V-shaped reversal from the early-2020 low.

Finally, Patterson Companies, Inc.
 is a mid-cap developer of dental and animal health products. (Yield = 3.2%.)

Earlier this month, the shares knifed to two-year highs, rising after the company’s second-quarter results.

The subsequent flag pattern has formed amid decreased volume, positioning the shares to build on the initial spike. Tactically, the post-breakout low (31.47) is followed by the breakout point, a level closely matching the top of the gap (29.25). A posture higher signals a bullish bias.

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.


Symbol* (Click symbol for chart.)

Date Profiled

Zscaler, Inc.


Dec. 7

Fortinet, Inc.


Dec. 7

Kulicke and Soffa Industries, Inc.


Dec. 7

Honeywell International, Inc.


Dec. 7

Dillard’s, Inc.


Dec. 4

Caleres, Inc.


Dec. 4

Spotify Technology S.A.


Dec. 3

Align Technology, Inc.


Dec. 3

Valero Energy Corp.


Dec. 3

GameStop Corp.


Dec. 2

Analog Devices, Inc.


Dec. 2

Cirrus Logic, Inc.


Dec. 1

Sonos, Inc.


Dec. 1

Dollar Tree, Inc.


Dec. 1

Nuance Communications, Inc.


Nov. 30

Northern Trust Corp.


Nov. 30

American Airlines Group, Inc.


Nov. 30

Microchip Technology, Inc.


Nov. 24

Coca-Cola Co.


Nov. 24

SPDR S&P Homebuilders ETF


Nov. 24

Zillow Group, Inc.


Nov. 23

Yeti Holdings, Inc.


Nov. 23

Carvana Co.


Nov. 23

Palo Alto Networks, Inc.


Nov. 20

Bank of America Corp.


Nov. 20

Eaton Corp.


Nov. 20

SPDR S&P Oil & Gas Exploration and Production ETF


Nov. 20

MetLife, Inc.


Nov. 19

Hilton Worldwide Holdings, Inc.


Nov. 19

American Express Co.


Nov. 18

Kohl’s Corp.


Nov. 18

FleetCor Technologies


Nov. 18

Applied Materials, Inc.


Nov. 17

Delta Air Lines, Inc.


Nov. 17

Consumer Staples Select Sector SPDR


Nov. 17

Ross Stores, Inc.


Nov. 16

Boeing Co.


Nov. 16

RingCentral, Inc.


Nov. 13

Urban Outfitters, Inc.


Nov. 13

Regions Financial Corp.


Nov. 13

iShares Europe ETF


Nov. 13

Flex, Inc.


Nov. 9

Snap, Inc.


Nov. 9

Norfolk Southern Corp.


Nov. 9

Materials Select Sector SPDR


Nov. 6

Communications Services Select Sector SPDR


Nov. 5

Health Care Select Sector SPDR


Nov. 5

Alphabet, Inc.


Nov. 5

Uber Technologies, Inc.


Nov. 5

Keysight Technologies, Inc.


Nov. 4

Harley-Davidson, Inc.


Nov. 4

Garmin, Ltd.


Nov. 4

Pinterest, Inc.


Nov. 3

Sony Corp.


Nov. 3

8×8, Inc.


Nov. 3

Exact Sciences Corp.


Nov. 2

Universal Display Corp.


Nov. 2

Dentsply Sirona, Inc.


Oct. 27

Maxim Integrated Products, Inc.


Oct. 21

The Travelers Companies, Inc.


Oct. 21

Micron Technology, Inc.


Oct. 20

Vulcan Materials Co.


Oct. 19

Utilities Select Sector SPDR


Oct. 19

ON Semiconductor Corp.


Oct. 16

Ford Motor Co.


Oct. 15

Texas Instruments, Inc.


Oct. 15

First Solar, Inc.


Oct. 13

Nevro Corp.


Oct. 12

Teradyne, Inc.


Oct. 12

SPDR S&P Homebuilders ETF


Oct. 9

Shake Shack, Inc.


Oct. 9

SPDR S&P Biotech ETF


Oct. 8

Alexion Pharmaceuticals, Inc.


Oct. 8

Twilio, Inc.


Oct. 8

Cloudflare, Inc.


Oct. 7

Ceridian HCM Holding, Inc.


Oct. 7

Motorola Solutions, Inc.


Oct. 6

RSailPoint Technology Holdings, Inc.


Oct. 1

Martin Marietta Materials, Inc.


Sept. 30

Whirlpool Corp.


Sept. 29

Abercrombie & Fitch Co.


Sept. 29

Blueprint Medicines Co.


Sept. 28

Zendesk, Inc.


Sept. 23

Scientific Games Corp.


Sept. 23

Crocs, Inc.


Sept. 14

Five Below, Inc.


Sept. 10

Eastman Chemical Co.


Sept. 10

International Paper Co.


Sept. 3

Anaplan, Inc.


Sept. 2

Celanese Corp.


Aug. 26

Westlake Chemical Corp.


Aug. 25

Deere & Co.


Aug. 24

Expedia Group, Inc.


Aug. 24

Johnson Controls International


Aug. 21

Canadian Solar, Inc.


Aug. 20

General Motors Co.


Aug. 20

Starbucks Corp.


Aug. 18

Builders FirstSource, Inc.


Aug. 18

Steel Dynamics, Inc.


Aug. 17

Brinker International, Inc.


Aug. 13

Enphase Energy, Inc.


Aug. 13

Nucor Corp.


Aug. 11

Freeport McMoRan, Inc.


Aug. 10

Natera, Inc.


Aug. 10

Industrial Select Sector SPDR


Aug. 6

Penn National Gaming, Inc.


July 30

Procter & Gamble Co.


July 29

SPDR S&P Metals & Mining ETF


July 28

iShares MSCI South Korea ETF


July 28

Advanced Micro Devices, Inc.


July 23

Materials Select Sector SPDR


July 20

Caterpillar, Inc.


July 20

Roku, Inc.


July 16

Cognizant Technology Solutions, Inc.


July 16

Costco Wholesale Corp.


July 15

Consumer Discretionary Select Sector SPDR


July 13

SunPower Corp.


July 13

Walmart, Inc.


July 8

Danaher Corp.


June 24

Fiverr International, Ltd.


June 19

HubSpot, Inc.


June 8

Square, Inc.


June 8

FedEx Corp.


June 3



June 3

iShares MSCI Japan ETF


May 29

Synopsis, Inc.


May 27

Agilent Technologies, Inc.


May 15

Qualcomm, Inc.


May 12

Facebook, Inc.


May 7

Dollar General Corp.


Apr. 28

ServiceNow, Inc.


Apr. 27

Five9, Inc.


Apr. 24

Chewy, Inc.


Apr. 24

Tesla, Inc.


Apr. 23

VanEck Vectors Semiconductor ETF


Apr. 17

Veeva Systems, Inc.


Apr. 17

Okta, Inc.


Apr. 16

Target Corp.


Apr. 16

Invesco QQQ Trust


Apr. 14

Apple, Inc.


Mar. 27

Nvidia Corp.


Mar. 27

iShares MSCI Emerging Markets ETF


Mar. 19

Microsoft Corp.


Feb. 22

* Click each symbol for current chart.

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Americans can’t file their income taxes fast enough — but they should brace for some unwelcome news in their 2020 returns




It seems like you can’t get people to file their 2020 tax returns fast enough.

People are filing their taxes at a blistering pace so far this year, underscoring how serious Americans are about getting any tax refund due or any stimulus-check money they missed last year. The IRS began accepting and processing 2020 tax returns slightly later than usual because its systems needed a breather after distributing a second round of stimulus checks in late December.

However, there is some bad news that many Americans should be prepared for when they finally get their return: The average refund so far is $2,880 — as unemployed skyrocketed in 2020 due to restrictions on businesses and shelter-in-place orders due to COVID-19 — significantly less than the $3,125 average refund at roughly the same point last year.

New IRS statistics released Thursday, when put in context, show people are submitting their individual tax returns at a much greater rate than they were early into last year’s tax season. As of Feb. 19, only eight full days into the 2021 filing season, the IRS received 34.69 million individual returns, agency statistics show.

That’s 30.5% fewer returns than the 49.8 million received by Feb. 21 last year — but that was 26 days into the 2020 filing season and weeks before conformation that the coronavirus had really taken hold in the U.S. Simple math, in fact, suggests the volume of individual returns this year.

Simple math suggests the volume of individual returns this year.

When dividing the nearly 34.7 million returns so far this year by eight filing days, the result is 4.3 million returns filed per day. The 49.8 million returns filed last year, divided by 26 filing days comes to 1.91 million returns per day.

Put another way: The IRS has received approximately 21% more individual returns than the agency received last year by Feb. 7, which was 12 days into the tax season last year. Right now, Americans are facing an April 15 deadline to file and pay their taxes (June 15 in Texas), unless they get an extension to Oct. 15, which gives them more time to file their return, but not to pay.

However, they don’t yet factor in refunds that include payments for the Earned Income Tax Credit, a powerful anti-poverty tax credit geared towards low- and moderate-income working families. Refunds incorporating the EITC and the Additional Child Tax Credit will start hitting bank accounts during the first week of March, according to the IRS.

After the Internal Revenue Service started accepting tax returns on Friday, Feb. 12, the agency took in 55 million returns in the first weekend alone, Internal Revenue Service Commissioner Charles Rettig said this week. These 55 million tax returns were not just individual tax returns. They also included business returns and a variety of other returns, IRS spokesman Anthony Burke said.

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‘Greed is rearing its ugly head and killing brotherly love’: My husband and his brother are at war over an inheritance from a beloved neighbor. What can we do?




Dear Quentin,

When my husband and his only (younger) brother were growing up, a childless neighbor was very kind to them and treated them as if they were her “nephews.” They even called her “Aunt Hilda.” They also treated her like family; my husband has visited her regularly over the years. But greed is rearing its ugly head and killing brotherly love.

When my husband was away in the army 30 years ago, Aunt Hilda gave a house and a piece of property to my husband’s brother when she decided to move to another state to care for her future mother-in-law, with the written legal condition that she had a lifelong ability to return and live in the house as well, should she want to or need to.

The brother decided he didn’t really like those terms, and after living in the house for a couple of years, used the “collateral” of the property to borrow money to buy a plot of land elsewhere and build another house. The “old” house has sat vacant for 20 years, but he does the minimum to keep it from disaster. She does not stay there because it is not maintained. He has stated that he doesn’t want to do anything that will encourage her to move back into the house.

‘At first, she discussed splitting her property 50/50, then she recalled that she had already given the brother the other house and land.’

Recently, the husband of Aunt Hilda died. She is 80, and decided that she wants to write a will to leave her money and property to my husband and his brother. At first, she discussed splitting her property 50/50, then she recalled that she had already given the brother the other house and land (current value is about $400,000, no small sum).

Now Aunt Hilda says since she has already given the younger brother the other house and the land, that should be taken into consideration. The brother is sending lengthy emails to my husband trying to convince him and Aunt Hilda that the previous “early inheritance” should not be taken into consideration “because it cost him so much trouble and work.”

It is of course up to Aunt Hilda how she wants to divide up the property, and whatever that is, everybody should respect her wishes. But if she asks the brothers how to do it fairly, what do you recommend? She is 80, but she might live another 15 years and any value assigned to the brother’s house today would likely change.

There is much more that could be added as to my brother-in law’s attempts to gain more than his brother, none of which reflects well on his character. My poor husband is heartsick over his brother’s greedy behavior, especially when he should be focusing on the welfare of Aunt Hilda — who just lost her husband — and grateful that she considers to leave them anything.

Should we intervene?

The Wife

Dear Wife,

Your brother-in-law is a lot of work and his inherited property is a lot of work. In that sense at least, as God made them, he matched them.

Your brother-in-law could be less self-centered and more compassionate, and it wouldn’t do any harm if he had one charitable bone in his body. But that is not who he is, and trying to wish him to be someone other than himself is an exhausting and ill-advised endeavor. Accept him for who and what he is, and you will both enjoy more peaceful nights as a result.

Remember, if one crazy person wants to have a fight with you, and you finally relent, there are two crazy people in that fight rather than one.

Your husband regards Aunt Hilda as a beloved relative and her estate as a gift, while his brother sees her estate as a lemon that can be squeezed time and again. What would I say to his brother? “The property required a lot of work over the years, and you have benefited from the property over the same amount of time. You chose to accept this inheritance early, and it has worked out very well for you.”

If he continued to make waves? I would feel compelled to tell him that it’s just plain unreasonable to constantly push for more. The love and care he lavished on his own property has been in direct proportion to the lack of care and duty bestowed upon Aunt Hilda’s home, and for all the years he enjoyed this property, she did not. You have to be prepared to stand up for what you believe is fair.

And remember, if one crazy person wants to have a fight with you, and you relent, there will be two crazy people in that fight rather than one. For that reason, advise Aunt Hilda to hire an estate attorney to draw up the papers fairly and squarely. Lawyers are paid well to deal with difficult personalities, and they have a duty to make sure their client’s wishes are upheld.

You can email The Moneyist with any financial and ethical questions related to coronavirus at

The Moneyist: ‘Warren Buffett and Harry Potter couldn’t get those two retired early’: Our spendthrift neighbors said our adviser was ‘lousy.’ So how come WE retired early?

Hello there, MarketWatchers. Check out the Moneyist private Facebook

 group where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

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Opinion: Higher interest rates could mean more cash for seniors




Here’s a common complaint I hear from seniors all the time: Interest rates are so low that it’s impossible to earn enough cash to supplement Social Security.

“Certificates of deposit don’t earn anything,” writes MarketWatch reader Camille: “Until the mid-2000s, you could easily earn 4% on a certificate of deposit (CD). Today, your money does not earn anything, which penalizes small savers and seniors.”

She’s right. Based on rates as I write this, if you put $500 into a one-year CD, you’d get back about $502.76 in 12 months. Wow! Two whole dollars and 76 cents! Probably enough for a loaf of bread or a gallon of gas, but not much else.

Low interest rates are a double-edged sword. If you’re borrowing money, it’s obviously good, but if you’re trying to make a few bucks, no. And this isn’t likely to change in any significant way, given the Federal Reserve’s recent announcement that it plans to keep its key “Fed Funds” rate low until the economy and jobs market picks up steam.

Since things like money-market funds and certificates of deposits are tied to the Fed, that’s tough news for anyone hoping to squeeze more out of their savings.

Meantime, those paltry returns stand in contrast to things that keep shooting up, like the cost of healthcare. I recently reported that drug prices, for example, are rising much faster than inflation, and much faster than the cost-of-living adjustment that seniors typically get from Social Security.

This one-two punch—more money going out and less coming in—is punishing seniors, pushing many closer to, if not into, poverty.

The need to earn more has nudged some seniors into the stock market, which in and of itself isn’t necessarily bad; financial advisers typically say that given the possibility of decades in retirement, even seniors should have some exposure to equities. But with stocks at nosebleed levels—the price-to-earnings ratio on the S&P 500

 is up 80% from a year ago—caution abounds. As usual, I’ll emphasize that how much a retiree should have in stocks depends on factors like age, risk tolerance and so forth, and is best discussed with a trusted financial adviser.

It’s often tempting when rates are super low like now to put cash into things with fat dividends, but “you have to be very careful,” cautions Andrew Mies, chief investment officer of 6 Meridian, a Wichita, Kansas-based wealth management firm. “Saying I’m going to go buy a high dividend-paying stock or MLP (master limited partnership, an investment vehicle common in capital-intensive businesses, like the energy sector) were disasters in 2020. Buying high-dividend stocks was one of the worst performing strategies you could have had last year, and some MLPs were down 30-40%.”

In other words, what’s the use of buying something that pays a dividend of 8%, 9% or more—only to see the stock itself plunge by a third? One market strategist, the late Barton Biggs of Morgan Stanley, once said “More money has been lost reaching for yield than at the point of a gun,” and he was right. Echoing that is none other than Warren Buffett, who has called reaching for yield “stupid,” but “very human.”

So what to do?

Mies urges something that many people have trouble with: Patience. That’s because rates, all of a sudden, appear to be moving higher, and if you can wait a bit, you just might be able to find safer investments that yield more than you might be able to get now.

He’s right. As of Friday, the yield on the 10-year Treasury bond stood at 1.34%, hardly robust, but up from 1.15% for the week. Two things to remember here: When bond rates go up, bond prices go down; higher bond yields can also make stocks less attractive on a relative basis as well.

Mies thinks rates will continue to climb. “I think you’re going to have a chance in the next 12 months to put money to work at higher interest rates.” Buying or selling are choices, but so is doing nothing, so “I do think that not getting aggressive right now is probably the most prudent action.”

And after rates go high enough, he thinks municipal bonds could become more attractive, corporate bonds could, Treasurys could. “There will be pockets of opportunity that pop up.”

You may want to consider what have long been considered so-called “widow and orphan” stocks: utilities. “Utilities have been trading as if the 10-year (Treasury) is significantly higher than it is. That could be a spot worth dipping your toe in.” Possibilities to consider—preferably in consultation with your financial adviser—include the Standard & Poor’s Utilities Select Sector Fund

and iShares’ Global Utilities ETF
XLU currently yields 3.3%, while JXI yields 2.78%, certainly more than those measly rates found in CDs or money-market funds.

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