The Dow Jones Technical Analysis - A Specialist in Technical Analysis

For Nov, 07 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 tells us to expect the markets to begin the day flirting with upward sloping support as that is defined in the midterm chart patterns of the S&P 500, Russell 2000, and Dow Jones industrial average.  If the markets remain above these levels we should, by rule, expect a progression towards the upward sloping resistance lines in those midterm chart patterns, but if the support lines that were tested again on Thursday break lower instead the market is likely to decline aggressively.  In the S&P 500, for example, the next level of support under the upward sloping support line that defines its midterm upward sloping channel is roughly 4% lower.  Our combined analysis suggests that risks are extremely high and declines could become quite aggressive if midterm upward sloping support lines break.  Thus far, they have not broken, but in addition the Dow Jones industrial average is very close to its upward sloping longer term resistance line, so according to our combined analysis the upside looks limited as compared to the downside risk at this time. 

Initial intraday trading parameters for the DOW exist between17550 - 17650
If 17550 breaks lower expect 17398
If17650breaks higher expect 17900
Otherwise expect17550 - 17650 to hold

If 17550 remains in tact as initial support, expect the market to increase to 17650. This reflects a tight near term down channel. However, and in line with our combined analysis, if 17550 breaks lower instead expect the market to decline to 17398 before it stabilizes again.


NEAR Term Analysis

Our combined near-term analysis shows us that the NASDAQ and the Russell 2000 are in very wide near term neutral patterns and they're right in the middle of their respective channels, but the Dow Jones industrial average and S&P 500 are in upward sloping channels and the Dow Jones industrial average is very close to support.  Support in those markets is inflection and if the dow Jones industrial average and S&P 500 hold support we should expect a relatively positive near term bias, but if those support levels break all markets are likely to revert to neutral near-term patterns and a decline to neutral near term support, the next level of support in the near term chart patterns of the dow Jones industrial average and S&P 500, should occur.

NEAR Term Support for the DOW exists at 17549

NEAR Term Resistance for the DOW exists at 17675

Dow_5_day


MID Term Analysis

Our combined midterm analysis tells us that the dow Jones industrial average and Russell 2000 are threatening to break below midterm upward sloping support, and the S&P 500 is right on its respective midterm upward sloping support line.  These support lines have not officially broken, but if they break our combined midterm analysis tells us to expect aggressive declines.  For example, the next level of neutral midterm support under the upward sloping support line in the S&P 500 is roughly 80 points below its upward sloping support line.  That suggests an aggressive decline if breaks occur.  That presents a high risk scenario, but at the same time support is holding and by rule we should expect it to hold unless it breaks.  If it holds we should expect a test of the upward sloping resistance line instead.

MID Term Support for the DOW exists at 17550

MID Term Resistance for the DOW exists at 17900

Dow_30_day


LONG Term Analysis

Our combined longer-term analysis has changed.  The reversal higher in the market last week caused the patterns to change and although the markets did not RE engage the upward sloping channels that began in the early part of 2013, those are still broken and officially dissolved, new upward sloping channels developed given the bounce back that occurred from the recent drubbing.  According to our combined longer-term analysis the market is now within striking distance of the new upward sloping resistance lines that exist in most markets.  According to our combined longer-term analysis we should expect the market to continue to increase and test upward sloping resistance so long as it remains above the recently broken neutral resistance lines in the S&P 500, Dow Jones industrial average, and NASDAQ.  These were all former highs, the market has broken above them slightly, and if the market remains above these levels a test of upward sloping resistance should be expected, but if the markets immediately break back below these now converted neutral support lines, which were once resistance, the upward sloping channels could possibly change into neutral ones.  Right now, our combined longer-term analysis points to higher levels and a test of upward sloping resistance before the market pulls back towards upward sloping support again.

LONG Term Support for the DOW exists at 16400

LONG Term Resistance for the DOW exists at 17650

Dow_1_year