The NASDAQ Technical Analysis - A Specialist in Technical Analysis

 

For Oct, 16 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 NASDAQ

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

Our combined analysis for Thursday tells us to focus on the S&P 500 and Dow Jones industrial average.  The Russell 2000 and NASDAQ appear stronger than these other markets, suggesting that if the markets do turn higher the NASDAQ and the Russell 2000 could lead the way.  However, for that to happen the S&P 500 and Dow Jones industrial average would need to break above their respective resistance levels.  If these markets are not capable of breaking above converted resistance lines, which were former support lines before support broke, additional downside should be expected across the board, but if the S&P 500 and Dow Jones industrial average break above resistance the resiliency demonstrated in the Russell 2000 and the NASDAQ should allow the markets to accelerate to the upside.  It is the ability or the inability of the S&P 500 and Dow Jones industrial average to hold converted resistance lines that will determine market direction in the immediate future according to our combined analysis.

Initial intraday trading parameters for the NASDAQ exist between4120 - 4216
If 4120 breaks lower expect 3996
If4216breaks higher expect 4305
Otherwise expect4120 - 4216 to hold

If 4120 remains in tact as initial support, expect the market to increase to 4216. This reflects a tight near term down channel. However, and in line with our combined analysis, if 4120 breaks lower instead expect the market to decline to 3996 before it stabilizes again.


NEAR Term Analysis

Our combined near-term analysis tells us that the markets are trying to break above an intra channel level of resistance, the NASDAQ and the Russell 2000 already have, but that intra channel level of resistance in the S&P 500 and Dow Jones industrial average is a barrier to higher levels and inflection accordingly.  If the Dow Jones industrial average and S&P 500 remain below their respective near term intra channel resistance levels we should expect all markets to turn down and test the lowest levels in the near term chart patterns again afterwards, but if the Dow Jones industrial average and S&P 500 join the Russell 2000 and the NASDAQ and break above their respective near term intra channel resistance lines as well aggressive increases are likely across the board.

NEAR Term Support for the NASDAQ exists at 4206

NEAR Term Resistance for the NASDAQ exists at 4305

Nas_5_day


MID Term Analysis

Our combined midterm analysis tells us that the S&P 500 and Dow Jones industrial average are breaking, but the Russell 2000 is well within its defined neutral midterm channel and the NASDAQ is threatening to reverse higher.  The Dow Jones industrial average and S&P 500 are relatively close to former levels of support, which are now neutral midterm resistance lines, and those are inflection levels accordingly.  If the S&P 500 and Dow Jones industrial average hold these converted resistance lines we should expect the markets to fall back aggressively again, but if the Dow Jones industrial average and S&P 500 break above their respective converted resistance lines all of the markets are likely to accelerate to the upside.

MID Term Support for the NASDAQ exists at 4216

MID Term Resistance for the NASDAQ exists at 4356

Nas_30_day


LONG Term Analysis

Our combined longer-term analysis paints a very bearish picture.  The big red candles from last week have caused breaks to occur in the longer-term chart patterns of the Dow Jones industrial average and S&P 500, and now those two major markets are following the higher beta markets, the Russell 2000 and the NASDAQ, which broke longer term uptrends many months ago.  In fact, the Russell 2000 is breaking more badly than the other markets, suggesting that small caps are leading the way down.  The breaks that occurred in the longer term chart patterns of the S&P 500 and Dow Jones industrial average pave the way for a decline that can wipe out all of the gains that occurred since the beginning of 2013.  Take a very close look at the longer-term chart patterns of the Dow Jones industrial average and S&P 500 and you will see that the market has moved in one direction and one direction only since the beginning of 2013, and without backing and filling a massive void exists between the beginning of that up cycle, which was the beginning of 2013, and the recent break.  Officially, longer-term upward sloping support in the S&P 500 and Dow Jones industrial average has broken and the door is wide open for a 24% decline on a technical basis.

LONG Term Support for the NASDAQ exists at 4345

LONG Term Resistance for the NASDAQ exists at 4593

Nas_1_year