The S&P 500 Technical Analysis - A Specialist in Technical Analysis

For Dec, 02 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 S&P 500

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

Our combined analysis for Tuesday tells us to expect the markets to begin the day looking for direction, but the risks are significantly higher than they were recently and the markets could decline aggressively given the breaks of midterm upward sloping support that happened in the S&P 500 and Dow Jones industrial average.  In addition, S&P 500 and NASDAQ each have tested their respective longer-term upward sloping resistance lines last week and they seem to be pulling back.  Although the dow Jones industrial average does not look the same as these markets given our longer term charts at this time, if the markets do start to pull back from current levels the successful tests of resistance that have occurred in the S&P 500 and NASDAQ will make the test that is happening now in the dow Jones industrial average an official test of resistance as well.  Tests of longer-term resistance are not official yet, because the Dow Jones industrial average will need to break lower for that to happen and it has not done that yet.  Currently, the market is like to begin the day looking for direction, and although resistance is an important inflection level it is actually support that is more important to our current observations because, quite simply, in order for the market to fall aggressively initial support levels would need to break.  If they do be prepared for momentum driven declines, but if they do not, if support remains intact, the market is likely to develop a much more neutral pattern instead.

Initial intraday trading parameters for the S&P 500 exist between2050 - 2059
If 2050 breaks lower expect 2024
If2059breaks higher expect 2065
Otherwise expect2050 - 2059 to hold

If 2050 remains in tact as initial support, expect the market to increase to 2059. This reflects a tight near term down channel. However, and in line with our combined analysis, if 2050 breaks lower instead expect the market to decline to 2024 before it stabilizes again.


NEAR Term Analysis

Our combined near-term analysis tells us that the markets have tested the lowest level of near term neutral support and they are trying to increase from support at this time.  However, most of the markets are also facing a level of intra channel resistance and we should expect the markets to begin the day Tuesday flirting with these levels.  In order to move higher and to test the highest neutral resistance levels in our near term chart patterns the intra channel resistance levels would need to break higher, so those are inflection.  If intra channel resistance breaks expect a test of the highest neutral resistance lines in the near term charts, but if near-term intra channel resistance remains intact expect the markets to fall back and threaten to break down below the lowest near term neutral support lines and develop downward sloping near-term patterns instead.

NEAR Term Support for the S&P 500 exists at 2050

NEAR Term Resistance for the S&P 500 exists at 2059

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MID Term Analysis

Our combined midterm analysis tells us that the dow Jones industrial average and S&P 500 are breaking below their midterm upward sloping support lines and the door is wide open for material market decline as a result.  The NASDAQ, however, is testing midterm upward sloping support, a new trend line that was established after Monday's trading session, and the Russell 2000 is relatively close to its support line as well.  According to our combined midterm analysis, however, the breaks that have already begun to take place in the S&P 500 and Dow Jones industrial average paint a bearish picture that could roll over onto the other markets.  If the Dow Jones industrial average and S&P 500 remain below recently broken midterm upward sloping support, which have now been converted into resistance lines, we should expect aggressive declines from the markets at some point.  Only if the markets reverse higher and back into these channels will that bearish observation go away.

MID Term Support for the S&P 500 exists at 2024

MID Term Resistance for the S&P 500 exists at 2069

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LONG Term Analysis

Our combined longer-term analysis tells us that the S&P 500 and NASDAQ are both pulling back from tests of their respective longer-term resistance lines but the Dow Jones industrial average seems to be slightly above the resistance line we have drawn for that market still.  According to our current longer-term analysis the dow Jones industrial average would need to break back and trigger a short signal in order for downside confirmation to exist in our longer-term analysis, but currently the tests of longer-term resistance that seem to have happen in the S&P 500 and NASDAQ point to lower levels and that could cause the dow Jones industrial average to fall.  If that happens the trendline of the Dow Jones industrial average could change slightly to represent official tests there as well.  Our combined longer-term analysis is warning us that material declines could follow the tests of longer-term resistance that happened in the S&P 500 and NASDAQ but it would require the Dow Jones industrial average to break back as well.

LONG Term Support for the S&P 500 exists at 2009

LONG Term Resistance for the S&P 500 exists at 2100

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