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

For Oct, 14 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 Tuesday tells us to expect the market to begin the day with a bias to decline and if support levels break our combined analysis tells us to expect the declines to be aggressive.  Our longer-term chart patterns are already quite bearish, the failure of the market to increase on Monday caused very steep downward sloping near-term patterns to develop, and the markets are already all threatening to break below midterm downward sloping support lines again too.  Our combined longer-term analysis also points towards much lower market levels and although the markets rarely decline aggressively without experiencing at least occasional positive days in between, our combined analysis tells us that if initial support levels break we could see yet another in this series of aggressive down days.  If support remains intact, however, an increase to a lower high is likely, but that will not change the bearish tone that already exists in our longer term chart patterns.  Our longer term charts are bearish!

Initial intraday trading parameters for the S&P 500 exist between1871 - 1892
If 1871 breaks lower expect 1469
If1892breaks higher expect 1899
Otherwise expect1871 - 1892 to hold

If 1871 remains in tact as initial support, expect the market to increase to 1892. This reflects a tight near term down channel. However, and in line with our combined analysis, if 1871 breaks lower instead expect the market to decline to 1469 before it stabilizes again.


NEAR Term Analysis

Our combined near-term analysis tells us that the market is in a steep near-term downward sloping channel and the market appears to be in the process of declining towards support.  According to our combined near-term analysis the market is likely to begin the day with a bias to decline as it opens on Tuesday and support should be expected.  If support remains intact we should expect the market to increase back towards near-term downward sloping resistance (lower high), but if support breaks we should expect even steeper near-term downward sloping channels.

NEAR Term Support for the S&P 500 exists at 1871

NEAR Term Resistance for the S&P 500 exists at 1899

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MID Term Analysis

Our combined midterm analysis shows us that the markets are threatening to break midterm downward sloping support.  The S&P 500 and Dow Jones industrial average are already breaking, and the Russell 2000 and NASDAQ are threatening to do the same.  Our combined analysis tells us that if the Russell 2000 and the NASDAQ break their respective downward sloping midterm support lines all markets can fall aggressively, but conversely if the S&P 500 and Dow Jones industrial average increase back into their respective channels all markets are likely to increase to their respective midterm resistance lines instead.  Our combined midterm analysis therefore tells us to watch these markets as groups and to recognize that the groups are not directly in parity yet, although they all are very close to support.

MID Term Support for the S&P 500 exists at

MID Term Resistance for the S&P 500 exists at 1892

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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 S&P 500 exists at 1930

LONG Term Resistance for the S&P 500 exists at 2100

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