The Dow Jones Technical Analysis - A Specialist in Technical Analysis

For Dec, 09 2014

(Individual Chart Analysis)

This is a no-frills analysis.  It is not designed to look good, it is designed to be effective. 


Summary of the Technical Analysis for the DOW

(This takes into account the near term, mid term, and longer term charts)

Our combined analysis for Tuesday tells us to expect the market to begin the day looking for direction and if the market is capable of not only holding support but it also breaks above near-term intra channel resistance the market is also than likely to increase aggressively.  According to the midterm chart patterns the S&P 500 and Dow Jones industrial average each tested midterm upward sloping support on Monday and support has held thus far.  In addition, the dow Jones industrial average has tested its longer term converted support level, the resistance level that broke higher recently, and if that remains intact it also will be a relatively bullish indicator.  However, it is the support lines of the midterm charts of the Dow Jones industrial average and S&P 500 that add most of the fuel to this rather bullish takeaway.  If those support lines break this bullish observation will change to neutral or bearish, but thus far those support lines have held and that is a positive sign.  According to our combined analysis we should continue to monitor midterm support levels as those are defined in the midterm charts of the dow Jones industrial average and S&P 500 and if those break we should be ready for additional decline, but they have not broken yet and that presents a bullish case according to rule.  If midterm upward sloping support remains intact we should expect the markets to increase and make a higher high, and thus far those levels are intact.

Initial intraday trading parameters for the DOW exist between17876 - 17815
If 17876 breaks lower expect 17995
If17815breaks higher expect 17732
Otherwise expect17876 - 17815 to hold

If 17876 remains in tact as initial support, expect the market to increase to 17815. This reflects a tight near term down channel. However, and in line with our combined analysis, if 17876 breaks lower instead expect the market to decline to 17995 before it stabilizes again.


NEAR Term Analysis

Our combined near-term analysis tells us that the markets have developed near term neutral channels and the support lines of these channels have been tested.  According to our combined near-term analysis if support levels remain intact we should eventually expect a test of the highest level of neutral resistance as shown in our near term chart patterns, but in order to get there the markets will need to break above an intra channel level of resistance.  Immediately, the markets are facing those levels and they are inflection.  If the market fails to break above near term neutral intra channel resistance lines it could turn down and break below support and that would be a very bearish near-term catalyst.  If near-term intra channel resistance breaks higher, however, the markets are capable of increasing back to their recent highs, at least that is the case for the Dow Jones industrial average.

NEAR Term Support for the DOW exists at 17806

NEAR Term Resistance for the DOW exists at 17876

Dow_5_day


MID Term Analysis

Our combined midterm analysis tells us that the Dow Jones industrial average tested its midterm upward sloping support line perfectly and the S&P 500 did as well.  Although the NASDAQ and the Russell 2000 look different, the tests of upward sloping support in the Dow Jones industrial average and S&P 500 are bullish so long as support levels remain intact.  Support needs to hold for this bullish environment to hold, so treat it as inflection.  If midterm upward sloping support remains intact we should expect the market to increase all the way back to midterm upward sloping resistance as that is defined in the midterm chart patterns.  That would mark a higher high by definition.  If support breaks the next level of neutral support under upward sloping support is not far away, as noted in the midterm chart patterns of the Dow Jones industrial average and S&P 500, so only modest declines are likely if the upward sloping support lines break.

MID Term Support for the DOW exists at 17825

MID Term Resistance for the DOW exists at 18000

Dow_30_day


LONG Term Analysis

Our combined longer-term analysis tells us that the S&P 500 is right on its respective longer-term upward sloping resistance line, the NASDAQ is as well, and the Dow Jones industrial average appears to be continuing a breakout.  If the NASDAQ and the S&P 500 inch higher slightly and hold through the end of the week they will confirm breakouts just like the Dow Jones industrial average and that presents a potentially bullish case in our longer-term chart patterns.  Given the close of these markets on their resistance lines on Friday a break would not require much of an upside move from the NASDAQ or the S&P 500.  Our combined longer-term analysis, as a result, could turn bullish; the Dow Jones industrial average already is.

LONG Term Support for the DOW exists at 17790

LONG Term Resistance for the DOW exists at 18270

Dow_1_year