The Dow Jones Technical Analysis - A Specialist in Technical Analysis

For Oct, 06 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 Monday tells us to expect the market to begin the day flirting with resistance and if initial resistance levels remain intact the market is likely to turn down and test the lowest near-term support levels in our near term chart patterns.  The midterm charts showed downward sloping channels last week, but at the end of the week goes downward sloping channels broke and now we are waiting for new midterm channels to develop.  In addition, something interesting is happening in the longer term chart patterns.  The Dow Jones industrial average and S&P 500 fell to test their respective upward sloping longer term support lines and thus far those longer term support levels in those markets are holding.  The NASDAQ and the Russell 2000 broke upward sloping support months ago, but they also tested levels of support last week, albeit neutral support.  In order for aggressive declines to continue the S&P 500 and Dow Jones industrial average would need to break below their respective upward sloping longer term support lines and hold.  If they do not break, those current patterns will tell us to expect 18,000 from the Dow Jones industrial average.  This is very important because by rule we should expect support lines to hold unless they break, and thus far they are holding.  If they continue to hold the bearish observations that have come from our longer term charts recently, the ones that pointed towards these recent lower levels and even lower levels if longer term support levels broke as well, made turn positive because support lines are actually holding in the long term charts right now.  

Initial intraday trading parameters for the DOW exist between16900 - 17027
If 16900 breaks lower expect 16678
If17027breaks higher expect 17157
Otherwise expect16900 - 17027 to hold

If 16900 remains in tact as initial support, expect the market to increase to 17027. This reflects a tight near term down channel. However, and in line with our combined analysis, if 16900 breaks lower instead expect the market to decline to 16678 before it stabilizes again.


NEAR Term Analysis

Our combined near-term analysis tells us that the market is in the near term neutral channel and it shows us that the neutral resistance line in these channels has already been tested.  If resistance remains intact the market is likely to begin the day with a bias to decline as it opens on Monday and a test of the lowest near term neutral support line should be expected if resistance holds.  However, if near term neutral resistance breaks higher upward sloping near-term channels can form.

NEAR Term Support for the DOW exists at 16855

NEAR Term Resistance for the DOW exists at 17027

Dow_5_day


MID Term Analysis

Our combined midterm analysis tells us that the market has broken the downward sloping channel that existed last week and now we're watching for new channels to form.  The former level of resistance that was broken has now been converted into support and neutral resistance lines have surfaced.  We should respect this triangular pattern that currently exists and expect increases if converted support is tested and declines if neutral resistance is tested respectively.  Soon, new midterm channels are likely to be clear after last week's break..

MID Term Support for the DOW exists at 16925

MID Term Resistance for the DOW exists at 17140

Dow_30_day


LONG Term Analysis

Our combined longer-term analysis tells us that the Dow Jones industrial average and S&P 500 fell to test their respective longer-term upward sloping channels and thus far those are holding.  The markets are doing this without increasing to test the upward sloping resistance lines, so the probability of a break below upward sloping support is high, but breaks have not yet occurred and by rule we should expect support to hold unless it breaks.  In addition, in the NASDAQ and the Russell 2000 neutral support lines were tested, in those markets the upward sloping channels have already broken, but again, in the NASDAQ and the Russell 2000 neutral support lines held as well.  If the Dow Jones industrial average and S&P 500 break their respective longer-term upward sloping channels it will confirm breaks in all markets and open the door for aggressive declines, so longer-term upward sloping support in the Dow Jones industrial average and S&P 500 are our focal points.  Thus far they are holding.

LONG Term Support for the DOW exists at 16900

LONG Term Resistance for the DOW exists at 17157

Dow_1_year