Category Archives: U.S. Indexes

Technical Analysis for Dow Jones Industrial Average

Bullish shaven head candlestick — first trading day of 2013
Bullish shaven head candlestick for the DJIA on the first trading day of 2013.

DJIA 6-Month Candlestick Chart

The tall bullish shaven head and shaven bottom candlestick is a graphical representation of the euphoria after a deal on the so-called fiscal cliff. It was excellent follow through for the bullish engulfing pattern of December 31. The market teetered at major support on December 27 and 28 when a deal was less than certain.

Technical analysis is all about assessing probabilities and there is a high probability that the Dow will test major resistance of 13,600. But there is a a lot of froth in this market as represented by the VIX and it can turn on a dime. The VIX has fallen 35.4 percent over the past two sessions, the biggest 2-day percentage drop in the history of the index. The next big news event is the employment report this Friday.

I would like to see the 10-Year U.S. Treasury close convincingly above 1.900% as confirmation that the Dow and S&P500 would have a chance to continue the near-term uptrend.

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Note: Click on HOME for updated postings. This technical analysis is for educational purposes so you can learn to trade online using candlestick charts and other technical indicators including volume, moving averages and oscillators. Please conduct your own chart analysis or consult your financial advisor before making investment decisions. The chart snippets are from BigCharts.com which I recommend and have used for fifteen years. The author of this article may hold long or short positions in the featured stock or index.

© 2013 TradeOnline.ca

DJIA candlestick chart analysis

Bullish engulfing candlestick pattern — last trading day of 2012
Candlestick chart analysis for the Dow Jones Industrial Average showing a bullish engulfing candlestick pattern for the last trading day of 2012.

DJIA 6-Month Daily Chart

Reference the last chart analysis published on December 27, 2012 showing the hammer candlestick line.

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Note: Click on HOME for updated postings. This technical analysis is for educational purposes so you can learn to trade online using candlestick charts and other technical indicators including volume, moving averages and oscillators. Please conduct your own chart analysis or consult your financial advisor before making investment decisions. The chart snippets are from BigCharts.com which I recommend and have used for fifteen years. The author of this article may hold long or short positions in the featured stock or index.

© 2012 TradeOnline.ca

Candlestick chart analysis: Dow Jones Industrial Average

Near-term downtrend and the hammer for DJIA
Candlestick chart analysis for DJIA showing the near-term downtrend with support at 13,000 and the 200 day moving average. The hammer is a reversal pattern.

DJIA 6-Month Candlestick Chart

The hammer candlestick line is a reversal indicator. In this case, there is an increased probability that the six day near-term downtrend for DJIA will end. The price action for the hammer is a graphical representation of the index attempting to hold support at the 13,000 level which is also near the 200-day moving average. Follow the price action the next day which will confirm or nullify the hammer. A confirmed break below 13,000 would be a bad omen for the Dow. I use a time and percentage filter for the confirmation: 2% break that holds for two trading days. There is flexibility with this trading rule. As a matter of fact, there is flexibility with most trading rules in technical analysis.

Reference the last chart analysis for the Dow Jones Industrial Average.

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Note: Click on HOME for updated postings. This technical analysis is for educational purposes so you can learn to trade online using candlestick charts and other technical indicators including volume, moving averages and oscillators. Please conduct your own chart analysis or consult your financial advisor before making investment decisions. The chart snippets are from BigCharts.com which I recommend and have used for fifteen years. The author of this article may hold long or short positions in the featured stock or index.

© 2012 TradeOnline.ca

U.S. Treasury 10-Year Note bar chart

Near-term uptrend with resistance at 1.90%
Chart analysis for the U.S. Treasury 10-Year Note showing the near-term uptrend with resistance at 1.90%. The intermediate trend is sideways and the major trend is down.

U.S. Treasury 10-Year Note

The near-term trend is up for the 10-year note which represents the movement of capital from the relative safety of the U.S. Treasury to other asset classes. The S&P 500 Index at 1,446 is above resistance levels of 1,425 and 1,440 with the financial sector being a big winner. There is hope that the U.S. will not drive over the so-called fiscal cliff as politicians do what they do best: talk with no action.  But hope will not sustain the advance in stocks and the U.S. Treasury for much longer. Some sort of resolution to the fiscal mess would see the yield breakout above resistance of 1.90% and a continuation of the near-term uptrend in major U.S. stock indexes. But and there is always a but when you trade online, the major trend is still down for the U.S. Treasury and the intermediate trend is sideways.

For the TSX Index (weighted to oil and material stocks) it would take a confirmed resolution of the fiscal cliff and some good economic numbers out of China to move this Canadian index. And even this may not do the job as caution is the prevailing mood as we end 2012 and will be the prevailing mood as we enter 2013.  It has been a dismal three year performance for the TSX Index relative to the U.S. Indexes.

Reference the last chart analysis for the this U.S. Treasury Note.

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Note: Click on HOME for updated postings. This technical analysis is for educational purposes so you can learn to trade online using candlestick charts and other technical indicators including volume, moving averages and oscillators. Please conduct your own chart analysis or consult your financial advisor before making investment decisions. The chart snippets are from BigCharts.com which I recommend and have used for fifteen years. The author of this article may hold long or short positions in the featured stock or index.

© 2012 TradeOnline.ca

S&P 500 Index candlestick chart analysis

Shooting star candlestick at the resistance zone
Candlestick chart analysis for the S&P 500 Index showing a shooting star candlestick and a hammer.  This is a graphical representation of the index struggling to break resistance at the 1,425 resistance zone.

S&P 500 Index 2-Year Weekly Chart

Candlestick chart analysis for the S&P 500 Index showing a shooting star candlestick and a hammer. This is a graphical representation of the index struggling to break resistance at the 1,425 resistance zone.

On a daily chart, you can see the 1,425 resistance zone in addition to the next near-term resistance level of 1,440.

A confirmed break above 1,440 would setup the S&P 500 Index for a test of major resistance at 1,470.

Reference the last chart analysis for the S&P 500 Index posted on November 23, 2012.

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Note: Click on HOME for updated postings. This technical analysis is for educational purposes so you can learn to trade online using candlestick charts and other technical indicators including volume, moving averages and oscillators. Please conduct your own chart analysis or consult your financial advisor before making investment decisions. The chart snippets are from BigCharts.com which I recommend and have used for fifteen years. The author of this article may hold long or short positions in the featured stock or index.

© 2012 TradeOnline.ca

S&P 500 Index chart analysis

Intermediate trend is down for the S&P 500 Index
S&P 500 Index chart analysis showing the downward sloping trendline.

S&P 500 Index YTD Daily Chart

The reversal of roles is an important concept in technical analysis: support levels that are breached become resistance in a new uptrend. That is the case for the 1410 to 1425 resistance zone.

Reference the last chart analysis for the S&P 500 Index posted on November 12, 2012.

Reference my chart analysis for the S&P 500 Index published on September 26, 2012 showing the support zone and the projected retracement zone if support was breached.

Reference the candlestick chart analysis for the S&P 500 Index published on April 17, 2012 where I gave the index a high probability of breaking resistance.

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Note: The above chart analysis is valid as of the publication date. To review current charts click on Home or perform a search. This technical analysis is for educational purposes so you can learn to trade online using candlestick charts. Please conduct your own chart analysis or consult your financial advisor before making investment decisions. The chart snippets are from BigCharts.com which I recommend and have used for fifteen years. The author of this article may hold long or short positions in the featured stock or index.

© 2012 TradeOnline.ca

S&P 500 Index bar chart analysis

Can the S&P 500 Index hold the 200-day moving average?
Bar chart for the S&P 500 Index showing support and resistance levels.

S&P 500 Index YTD Daily Bar Chart

Near-term downtrend for the S&P 500. If the Index cannot hold the 200-day simple moving average which is near the 50% retracement zone, then the next test is 1,340 which is the 66% retracement zone. If the index cannot hold 1,340 the next support level is around the June low price zone of 1,275.

When you trade online, always assess the probabilities. A comfortable cash level is appropriate until there is technical evidence of a reversal of the near-term downtrend.

Update for November 23, 2012: S&P500 held support at the 66% retracement zone on the intermediate downtrend. Today, it is currently trading at 1,405 and will meet resistance at 1,410 and then major resistance at 1,425.  The reversal of roles is an important concept in technical analysis: what was support on the way down is now resistance on the way up. The near-term trend is up but the intermediate trend is still down.

Reference the last chart analysis for the S&P 500 Index based on the weekly chart.

Relevant articles picked from the Web:

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Note: Click on HOME for updated postings. This technical analysis is for educational purposes so you can learn to trade online using candlestick charts and other technical indicators including volume, moving averages and oscillators. Please conduct your own chart analysis or consult your financial advisor before making investment decisions. The chart snippets are from BigCharts.com which I recommend and have used for fifteen years. The author of this article may hold long or short positions in the featured stock or index.

© 2012 TradeOnline.ca