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

For Sep, 08 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 Monday tells us to expect the market to begin the day with a bias to increase and it tells us to expect tests of very important inflection levels.  If the markets hold these major inflection levels, 17157 in the Dow Jones industrial average for example, the markets are likely to turn down and if they do bearish candles can develop.  If the markets break out, however, the exact opposite is likely.  The catalyst for Monday and the days ahead are very simple.  The market is at major inflection, the market has flirted with major inflection a few times, and the ability or the inability of the market to hold major inflection will not only govern trading decisions on Monday, but for the days and weeks that follow.  Use resistance as an inflection parameter; expect the market to begin the day with a bias to increase on Monday, and the ability or the inability of the market to hold resistance will guide trading decisions accordingly.

Initial intraday trading parameters for the S&P 500 exist between2005 - 2010
If 2005 breaks lower expect 1991
If2010breaks higher expect 2055
Otherwise expect2005 - 2010 to hold

If 2005 remains in tact as initial support, expect the market to increase to 2010. This reflects a tight near term down channel. However, and in line with our combined analysis, if 2005 breaks lower instead expect the market to decline to 1991 before it stabilizes again.


NEAR Term Analysis

Our combined near-term analysis tells us that the market is in a neutral near-term pattern and it is in the process of increasing towards resistance.  According to our combined near-term analysis the market should begin the day with a bias to increase as it opens on Monday and we should expect a progression higher to resistance by rule.  If resistance remains intact we should expect the market to turn down and test the lowest support lines in these neutral near-term patterns, but if resistance breaks higher upward sloping near-term patterns are likely to develop.

NEAR Term Support for the S&P 500 exists at 2005

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 markets are close to midterm neutral resistance, at least the S&P 500 and Dow Jones industrial average are, and these resistance lines are important.  If these markets remain below midterm neutral resistance all markets should turn down and retest their recent neutral intra channel support lines.  These are the lowest levels from Friday's trading session, and another test is likely if resistance remains intact, but if resistance lines break higher the neutral midterm patterns that developed on Friday will transition into upward sloping patterns and open the door for much higher market levels.

MID Term Support for the S&P 500 exists at 1991

MID Term Resistance for the S&P 500 exists at 2009

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LONG Term Analysis

Our combined longer-term analysis tells us that DOJI patterns have formed in the S&P 500, NASDAQ, and Dow Jones industrial average.  These developed around major inflection points, and this combination is important.  However, a pattern like this does not necessarily mean that the market will turn down, every time we have seen these patterns in the past year the markets have broken out instead of reversing lower, but the combination of these potential reversal patterns and longer-term inflection points still must be respected.  If the markets turn down and negatively engulfed the DOJI patterns that developed last week there will be major red flags in the longer term patterns, but if the markets breakout above the inflection parameters that they are testing now, 17157 in the Dow Jones industrial average for example, the markets may accelerate an increase by about 5%.  Our longer-term analysis tells us that if these resistance levels hold and negative candles come in the week ahead the market can fall by about 7% quickly (with more over time), but if breakouts occur we should expect the market to increase by about 5%.

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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