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

For Jul, 17 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 Thursday tells us to expect the market to begin the day with a bias to decline, and although the dow Jones industrial average has been much stronger than the Russell 2000, which is starting to break down, even the dow Jones industrial average is likely to fall back to its midterm support level if its midterm resistance level remains intact.  The dow Jones industrial average, NASDAQ, and S&P 500 all tested resistance levels on Wednesday and thus far resistance levels are holding.  That tells us to expect the market to begin the day with a bias to decline of Thursday, but it also tells us to expect tests of the associated support levels in those markets.  This does not apply to the Russell 2000, because if the other markets begin to decline within their established channels, the Russell 2000 is likely to break down.  Our combined analysis suggests that tests of support are likely in those other markets, as well be true so long as resistance lines remain intact, so that would also suggest further decline in the Russell 2000.  I treat resistance the other markets as inflection, however, and if resistance lines break higher expect steeper near-term upward sloping channels to form in the dow Jones industrial average, S&P 500, and NASDAQ.  Thus far resistance is holding, and by rule we should expect support accordingly.

Initial intraday trading parameters for the S&P 500 exist between1970 - 1987
If 1970 breaks lower expect 1962
If1987breaks higher expect 1994
Otherwise expect1970 - 1987 to hold

If 1970 remains in tact as initial support, expect the market to increase to 1987. This reflects a tight near term down channel. However, and in line with our combined analysis, if 1970 breaks lower instead expect the market to decline to 1962 before it stabilizes again.


NEAR Term Analysis

Our combined near-term analysis tells us that upward sloping channels exist in all markets except the Russell 2000, but the Russell 2000, dow Jones industrial average, and S&P 500 have all tested their respective near-term resistance lines and therefore we should expect the market to begin the day with a bias to decline as it opens on Thursday.  If resistance levels remain intact we should expect tests of near-term support in those markets, and if that happens the NASDAQ will likely develop a neutral near-term trading pattern.  If near-term resistance levels break higher more aggressively slow near-term upward sloping channels are likely instead.

NEAR Term Support for the S&P 500 exists at 1970

NEAR Term Resistance for the S&P 500 exists at 1988

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MID Term Analysis

Our combined midterm analysis tells us that the dow Jones industrial average has tested resistance, the NASDAQ may have done the same, and if the markets begin to pull back we will also have considered the S&P 500 to have established a neutral resistance line as well.  Combined, these observations tell us that the market may have tested midterm resistance and it may already be in the process of declining back to midterm support levels, by rule.  This observation does not apply to the Russell 2000, which is much weaker than the other markets, and if the other markets fall back to test their respective midterm support levels the Russell 2000 is likely to break down below its neutral support level and become even more bearish.

MID Term Support for the S&P 500 exists at 1962

MID Term Resistance for the S&P 500 exists at 1986

Sp_30_day


LONG Term Analysis

Our combined longer-term analysis shows us that the Russell 2000 developed a very bearish candle last week and the NASDAQ dipped back to its upward sloping resistance line, opening the door for a potentially bearish read from that market in the coming week.  The Dow Jones industrial average and S&P 500 are not as bearish as the Russell, and more would need to be done to cause a bearish read from the NASDAQ, so our combined longer-term analysis also appears to be in a state of limbo at this time.

LONG Term Support for the S&P 500 exists at 1865

LONG Term Resistance for the S&P 500 exists at 2030

Sp_1_year