The Dow Jones Technical Analysis - A Specialist in Technical Analysis

For Jul, 22 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 pay attention to initial resistance levels in the NASDAQ and the Russell 2000 specifically.  These markets flirted with breaking above their respective near term and midterm downward sloping resistance lines late in the day on Monday, and the ability or the inability of these markets to hold their respective resistance lines will likely govern market direction for the Dow Jones industrial average and S&P 500 as well, according to our combined analysis.  If the NASDAQ and the Russell 2000 remain below resistance the S&P 500 and Dow Jones industrial average are likely to test their midterm support levels, something they have not done yet.  However, if the NASDAQ and the Russell 2000 break above midterm downward sloping resistance accelerated market moves are likely not only in the NASDAQ and the Russell 2000, but the Dow Jones industrial average could make new highs and breakout, with the S&P 500 following suit.  Respect midterm downward sloping resistance in the NASDAQ and the Russell 2000, and even though those markets may not break out to new highs if a rally ensues, they do appear to be indicators of inflection for Tuesday's session, and possibly the days that follow.  Midterm support for the NASDAQ exists at 4431.  If the NASDAQ holds 4431 an 80 point decline or more is likely to follow this week.  If the NASDAQ breaks above this level and the Russell breaks above its midterm downward sloping resistance line as well a broad base rally is likely to follow and if that happens the Dow Jones industrial average is likely to break out again.

Initial intraday trading parameters for the DOW exist between16920 - 17100
If 16920 breaks lower expect 16400
If17100breaks higher expect 17170
Otherwise expect16920 - 17100 to hold

If 16920 remains in tact as initial support, expect the market to increase to 17100. This reflects a tight near term down channel. However, and in line with our combined analysis, if 16920 breaks lower instead expect the market to decline to 16400 before it stabilizes again.


NEAR Term Analysis

Our combined near-term analysis tells us that the markets may be in near-term downward sloping channels and the resistance lines in these channels are not far away.  The markets were flirting with near-term downward sloping resistance lines as they came to a close on Monday and resistance should be treated as inflection for Tuesday accordingly.  If near-term resistance levels remain intact the market is likely to fall and make a lower low, lower than Monday's lows.  However, if near-term downward sloping resistance breaks higher instead we should expect the markets to accelerate back to recent highs, which could also open the door for material breakouts in the Dow Jones industrial average.

NEAR Term Support for the DOW exists at 16930

NEAR Term Resistance for the DOW exists at 17100

Dow_5_day


MID Term Analysis

Our combined midterm analysis tells us that midterm resistance levels were tested in the NASDAQ and the Russell 2000, those were downward sloping resistance lines, and this was the second test of resistance that happened before a test of support.  At the same time, the S&P 500 and the Dow Jones industrial average have not tested their respective midterm support levels although resistance lines were tested in those markets already.  The inflection parameters seem to be focus on the Russell 2000 and the NASDAQ at this time.  If those markets remain below their respective midterm downward sloping resistance lines the markets are all likely to be under a relative degree of pressure and declines should be expected to midterm support levels (see the charts).  However, if the NASDAQ and the Russell 2000 break out beyond midterm downward sloping resistance the door is open for accelerated market moves to the upside and potential breakouts in the Dow Jones industrial average.

MID Term Support for the DOW exists at 16905

MID Term Resistance for the DOW exists at 17170

Dow_30_day


LONG Term Analysis

Our combined longer-term analysis tells us that the Russell 2000 remains bearish, the NASDAQ did reverse, but a DOJI pattern form there and the NASDAQ would need to decline in the coming week to cause a bearish pattern to exist in that market, but the S&P 500 and Dow Jones industrial average are not providing warning signs yet.  More would need to happen in order for those markets to show the same cautionary candle patterns that the Russell 2000 and potentially NASDAQ currently demonstrate.

LONG Term Support for the DOW exists at 16400

LONG Term Resistance for the DOW exists at 17600

Dow_1_year