Stock Market Technical Analysis
Daily technical analysis for the most popular stock market indices as well as individual shares.
The following technical analysis looks at both short-term and long-term market moves. The analysts review the support & resistance levels and give opinions on where the markets are heading. For more technical analysis also see:
Stock Market Technical Analysis - Updated: 22 February 2017
|| [8:07am] S&P 500 Technical Analysis (30 mins chart)
Comment: the RSI is around its neutrality area at 50%.
- S&P 500 pivot point: 1799
- Our preference: SHORT positions below 1799 with 1770 & 1766 as next targets.
- Alternative scenario: The upside breakout of 1799 will open the way to 1805 & 1812.
|| [8:07am] DAX 30 Technical Analysis (30 mins chart)
Comment: the RSI is mixed.
- DAX 30 pivot point: 9080
- Our preference: Short positions below 9080 with targets @ 8985 & 8935 in extension.
- Alternative scenario: Above 9080 look for further upside with 9150 & 9225 as targets.
For more stock market views or technical analysis see:
Applying Technical Analysis to Stock Markets
Below, an older (and still useful) case study on the US stock market by Shai Heffetz, InterTrader, 17-Aug-2011.
The current potential for a bear market phase is present across many US and global stock market indices, however, for the purpose of this discussion we will specifically consider the S&P 500.
This index includes stocks from the two major US stock exchanges, NASDAQ and the New York Stock Exchange. As such, it represents 500 of the largest companies in the United States and also a number of companies with headquarters situated outside the US. It is often cited as a measurement of the US economy and a leading indicator of things to come.
The chart below covers the longer-term trend for the S&P 500. Here we see that it broke out of the Ichimoku cloud at the beginning of September 2010 and entered a strong bull phase that lasted for nearly six months. This was despite a number of minor price corrections in the process.
This lasted until the middle of February 2011 when the bull market starting running out of steam. At the middle of March 2011, the price moved back into the Ichimoku cloud, leading to a period of sideways trading that lasted for about five months.
This can be seen in more detail in the chart below. Despite several up and down swings, the spread betting price remained in a relatively narrow range, dipping in and out of the Ichimoku cloud several times.
On 1 August, it broke downwards out of the Ichimoku cloud. Many traders seemed to expect it to turn around again before reaching the support level of 1264.90, where it had turned around on the 15 June.
Sadly, this did not happen. On 2 August, the price formed a new low of 1253.60 and after that, it went into freefall. On 9 August, it temporarily dropped to 1079.90 before recovering again somewhat.
Since then, it has recovered further and even broken through the red short-term average of the Tenkan Sen. At the time of writing, it is trading at 1191.30.
What caused the severe decline we saw since the beginning of August? There are a variety of factors, including the US debt crisis, the continuing economic woes in Europe, and worse than expected economic performance in the US.
Purely from the point of view of index technical analysis, we are currently right in the middle of a bear market. The price is far below the Ichimoku cloud and the green Chinkou Span line is also well below the price 26 periods ago.
Further bad news could easily see the market test new lows. If the price drops below the red Tenkan Sen again, prepare yourself for a continuation of the bear phase.
Traders who plan to go long of the S&P might have a long wait. It is a virtual eternity from where we stand now to the recent maximum of 1357.00 that we saw on the 7 July.
Before the price emerges upwards from the Ichimoku cloud and reaches that level, there can be no talk of anything resembling a bull run.
As always, there will be opportunities for day traders to cash in on short term movements. If we look at the 4-hour chart below it is clear that a short-term opportunity will present itself if the price breaks out of the Ichimoku cloud in an upwards direction.
Spread Trading and CFDs carry a high level of risk and you may lose more than your initial investment. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
Article approved/supplied by PipTrade which is a trading name Henyep Capital Markets (UK) Limited which is authorised and regulated by the Financial Conduct Authority. Register No: 186171.
'Stock Market Technical Analysis' edited by Jacob Wood, updated 22-Feb-17
Technical Analysis Index - an Index of Daily Technical Analysis articles covering Trends, Supports and Resistance Levels for some of the major Forex markets as well as US Stock Market Indices like the Dow, NASDAQ 100 and S&P 500.
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