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

For Sep, 05 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 tells us to expect the market to begin the day with a bias to increase as it opens on Friday and it tells us to expect the market to test intra channel resistance levels as those are defined in the near term chart patterns, but the ability or the inability of the S&P 500 and DJIA to hold its midterm upward sloping support line is really the main catalyst.  The NASDAQ and the Russell 2000 have already begun to break below their midterm upward sloping support lines, opening the door for momentum driven declines if the breaks are corroborated by a break in the S&P 500 and DJIA as well.  On Thursday, the S&P 500 only tested its midterm upward sloping support line, and thus far support is holding.  The Dow Jones industrial average tested support as well (neutral), and thus far support is holding there as well.  Therefore, in order for the bearish midterm reads stemming from the midterm chart patterns of the NASDAQ and the Russell 2000 to be corroborated the S&P 500 and Dow Jones industrial average would also need to break.  For example, the Dow Jones industrial average would need to break below 17020 for it to confirm downside moves, and the S&P 500 would need to break below 1994.

Initial intraday trading parameters for the S&P 500 exist between1992 - 1998
If 1992 breaks lower expect 1907
If1998breaks higher expect 2010
Otherwise expect1992 - 1998 to hold

If 1992 remains in tact as initial support, expect the market to increase to 1998. This reflects a tight near term down channel. However, and in line with our combined analysis, if 1992 breaks lower instead expect the market to decline to 1907 before it stabilizes again.


NEAR Term Analysis

Our combined near-term analysis tells us that near term neutral channels have formed, neutral support lines were tested, and the market is poised to increase if support levels remain intact, but in addition the market is facing a new intra channel resistance level that is very close to current market levels.  In order to move higher the market would not only need to hold support but it also would need to break above intra channel resistance.  Our combined near-term analysis tells us to expect the market to begin the day with a bias to increase on Friday, but barriers exist and hurdles must be crossed in order for the market to continue to move up.  If support levels break instead the market can fall aggressively.

NEAR Term Support for the S&P 500 exists at 1998

NEAR Term Resistance for the S&P 500 exists at 2010

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MID Term Analysis

Our combined midterm analysis tells us that the NASDAQ and the Russell 2000 are breaking below their midterm upward sloping support lines and the door is wide open in those markets for aggressive declines to neutral midterm support.  The Dow Jones industrial average and the S&P 500 are not as bearish, they have not broken their upward sloping support lines, but upward sloping support was tested in the S&P 500 (neutral for the Dow).  Thus far, upward sloping support has held and if it continues to hold we should expect the market to trend higher and test upward sloping resistance, but if the market breaks below midterm upward sloping support as that is defined in the S&P 500 it will corroborate the breaks that have already happened in the Russell 2000 and the NASDAQ, and that would open the market up for momentum driven declines that could take the S&P 500 to near 1900 again.

MID Term Support for the S&P 500 exists at 1993

MID Term Resistance for the S&P 500 exists at 2014

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LONG Term Analysis

Our combined longer-term analysis is not bearish, but if the markets turn down from these levels double tops will be established.  That means, if the markets end this coming week lower it could mark a double top and momentum declines can follow.  Last week I outlined how serious that could be, so please review the newsletter I wrote on August 29, Sunday, and use that summary for this week as well.  Depending on how this week ends, our longer term chart patterns could become quite bearish, otherwise it is status quo pointing to the upward resistance lines.

LONG Term Support for the S&P 500 exists at 1900

LONG Term Resistance for the S&P 500 exists at 2055

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