S&P and Dow: Weekly Stock Market Analysis (Dec 21-Dec 24)

S&P and Dow: Weekly Stock Market Analysis (Dec 21-Dec 24)

Overall, it was a fairly uneventful week in terms of price action in the stock markets. We had a lot of nice tradable moves during the week, but ultimately the market did not move into or out of any technical significant areas. Volume was light, except for Friday which was due to index rebalancing and contract expirations. In terms of the overall movement throughout the week, the S&P traded in a smaller range than average, only moving about 21 points all week; the weekly (14) average is just under 36 points and heading into this week was slightly higher.

Technically, the stock market (S&P and Dow Jones) are still range bound and that range is very much intact. The S&P closed on Friday right around 1102.

Near term support is at 1094-1093 but movement below this level does indicate a high probability of retesting range lows. Support near the lower range is 1086 and 1084. A drop below 1080 (using a buffer below the lows) would punch us out of the range we were in. The target for that breakout is 1055 which is just below a hourly trending support line (going back to Sept). There is important interim support which will provide us with other signals if the breakout downward does occur. There is little support, in the event of a break downwards, until 1072. This is the top from a gap that occurred back in early November. The low of the gap is 1070. If that gap is closed by new price movement it is a bearish sign and prices are expected to continue to chart lower into the 1068-1064 area. Support also comes in at 1060, therefore it will take fierce action, given our average weekly range, to reach 1055 if in fact this market does break lower.

If we look at a daily chart, we see that the level we are at right now is right on a downward sloping trendline extending back from late 2007. Really, the current range gives us our trading signals, as a breakout of the current range will also cause a break of the old trendline, a break lower out of the range will show that trendline has held. But no matter which way the market breaks, old trendlines often have an impact on future price movements (see my article in the December issue of Stock & Commodities magazine), so it is worthwhile keeping on the charts.

On the upside we have resistance at 1104 which was respected during the afternoon sessions of Thursday and Friday. Beyond this we have the Thursday open near 1106 followed by 1108 which will also act are resistance. Beyond this is no significant resistance until 1116, although there is some minor levels at 1113-1114. The resistance area near the highs is 1116-1120. Moves have been fast and sharp up in this area, and it deserves respect. If this range is broken out of, targets are 1123, 1128 and 1131.

The Dow Jones Industrials is another index can be looked at. That market has been analyzed by my friend Adam Hewison. He uses a few different tools to gauge this market, and also gives a slightly longer term view for those that are interested in looking beyond the next several sessions and are concerned about what may happen in the New Year. So in that light, you can view the Dow Analysis video As the Dow Goes, So Goes the Country here:http://broadcast.ino.com/education/dow1217/?campaignid=3\%22+target%3D


With the holiday season I may not have an analysis posted next weekend. So please pay attention to the range on the chart. Have a wonderful and safe holiday season, and profitable trading in the meantime. For those of you who view my EUR/USD analysis each night, well, I will see you soon, since we still got several sessions before Christmas.

Cheers and Happy Trading!


CFDs trading analysis by Cory Mitchell, CMT for CFDsPros

S&P Analysis for the Upcoming Week: Dec 14-18

The S&P 500 which is a good representation of the overall stock market, is still very much range bound, and is likely to remain so until the new year. A very quiet Friday with little volume did little to inspire confidence to the contrary.

1100 is the nearest main support level for the upcoming week, with a move below it indicating a test of 1098-1097 with the lower portion of the gap created Friday. Support beyond is 1095-1094 but movement to this level does indicate a high probability of retesting range lows. Support near the lower range is 1086 and 1084. A drop below 1080 (using a buffer below the lows) would punch us out of the range we were in. The target for that breakout is 1055 which is just above a hourly trending support line (going back to Sept). There is important interim support which will provide us with other signals during the week. There is little support, in the event of a break downwards, until 1072. This is the top from a gap that occurred back in early November. The low of the gap is 1070. If that gap is closed by new price movement it is a bearish sign and prices are expected to continue to chart lower into the 1068-1064 area. Support also comes in at 1060, therefore it will take fierce action to reach 1055 if in fact this market does break lower. This is because the average weekly range for the S&P is just over 37 points, and the market closed on Friday right around 1106.

On the upside resistance is at 1109-1111. A move above this area represents the likely scenario that range highs will be tested. The resistance area near the highs is 1116-1120. If this range is broken out of, targets are 1123, 1128 and 1131.


Written by Cory Mitchell, CMT for CFDsPros

Stock Market Analysis Nov. 30 – Dec. 4

The following is the stock market outlook, using the S&P 500, for the week of Nov 30, 2009 – Dec 4. This analysis can be used to help in day trading or swing trading decisions, as well as for investors to gain technical insight into the current market.

Events like which occurred on Wednesday, with Dubai World saying it would not be able to pay it’s debt, are the type of events which will be the catalyst for this market going lower.

Technically this market rally is on shaky ground at these levels. We have divergence on multiple time frames, not to mention inter-market divergence (markets moving contrary to the general relationship). Divergence can last for a long time and is a not a trading signal in itself, but when news such as that of Dubai World is released, hardly ever does it come alone. There are still many systemic problems, and no matter how much money is thrown at a problem, traders and investors still get scared.

Right now the trend is still up, and should be traded as such, but be cautious. Support is Friday’s low at 1084. A drop below that would punch us out of the range we were in. The target for that breakout is 1055 which is just above a hourly trending support line. There is important interim support which will provide us with other signals during the week. There is little support, in the event of a break downwards, until 1072. This is the top from a gap that occurred back in early November. The low of the gap is 1070. If that gap is closed by new price movement it is a bearish sign and prices are expected to continue to chart lower into the 1068-1064 area. Support also comes in at 1060, therefore it will take fierce action to reach 1055 if in fact this market does break lower.

The average weekly range for the S&P is just under 37 points, and the market closed on Friday right around 1091.

If the upcoming week brings rainbows and butterflies, here are the levels to watch on the upside: To move higher the first resistance point is a short term level at 1100. We also have resistance at 1105 followed by1108 and 1110. Beyond this are recent highs in the market, right around 1114. A break above that indicates another upswing. Volume should be rising if this occurs, but so far this market rise has not occurred on large volume, so look for volume to at least remain steady. A decline in volume on a breakout is likely to result in a failed signal.

Targets beyond 1114 are 1118, 1123, 1128 and 1131.

Trade with the trend, but don’t become attached to it.

Cory Mitchell, CMT

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