S&P, Nasdaq reclaim the 200-day moving average The U.S. markets’ corrective bounce — initially flagged Thursday — may be morphing into a more legitimate rally attempt. Consider that the S&P 500 Index has reclaimed significant resistance this week, placing it on firmer technical ground as detailed below. 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 rallied to a widely-tracked inflection point at the 200-day moving average. The S&P’s 200-day currently rests at 1,906, and the index has reclaimed this level in Tuesday’s early action. On further strength, next resistance holds at 1,925. Meanwhile, the Dow industrials’ near-term backdrop is weaker. Still, the index has reclaimed its breakdown point of 16,315, a level better illustrated on the daily chart. And the Nasdaq Composite’s near-term backdrop is the strongest. Consider that the index has edged atop its 200-day moving average, currently 4,303. On further strength, its next notable overhead rests at its breakdown point of 4,355, a level also illustrated on the daily chart below. Widening the view to six months adds perspective. On this wider view, the Nasdaq has reversed sharply from five-month lows, reclaiming its 200-day moving average. Again, next resistance holds at its breakdown point — Nasdaq 4,355 — and a close higher would place the index within its former range. Moving to the Dow, its six-month backdrop is weaker. Three inflection points stand out: Resistance at the Dow’s 2013 closing high of 16,576.The 200-day moving average, currently 16,586.Resistance at the Dow’s absolute 2013 peak of 16,588. The Dow closed Monday at 16,400, placing it comfortably under, but within striking distance of, major resistance. So while the Dow’s corrective bounce remains underway, its longer-term bias points lower pending a close atop this area. And the S&P 500 Index has reached the U.S. markets’ headline technical test. The index closed Monday at 1,904, just under its 200-day moving average, currently 1,906. Consider that the S&P’s recent violation of the 200-day marks its first price action below this trending indicator since November 2011.The bigger picture The U.S. markets’ corrective bounce — initially flagged Thursday — may be morphing into a more legitimate recovery attempt. While the technicals are partly detailed above, also consider the prevailing sentiment backdrop, as measured by the Volatility Index VIX, -13.41% This first chart is a four-year view, with each bar representing one week. Consider that the VIX completely took flight last week, rising to its highest levels since November 2011. And as always, extreme VIX highs signal excessive investor pessimism, or fear, consistent with major S&P 500 lows. Narrowing the view to one year adds perspective. Each bar now represents one day. As illustrated, the VIX has swiftly retreated from last week’s high, plunging 40% to Monday’s close of 18.57. Still, even after the downdraft, the Volatility Index is positioned at a relatively high level. Before October, Monday’s close would have marked the VIX’ fourth-highest across the past 52 weeks. More plainly, the VIX has room to fall from current levels, meaning that the S&P 500 has room to rise. Against this backdrop, the S&P 500’s immediate inflection point is well-defined. By MICHAEL ASHBAUGH TECHNICALS COLUMNIST