S&P 500, Dow Jones Industrials, New York Stock Exchange – 14 February 2016
Stock markets around the world have been trading under stress. We have seen huge declines in the Chinese stock market, European stock markets and also in the United States Stock markets.
Its been some time since we have updated the charts for the U.S. stock markets and the markets have kept us busy. In the 24 November 2015 article we discussed that if a key level of 1993 on the S&P 500 would get broken down, then the market is heading for a large correction. This is what has happened.
Now the market is approaching key levels and the next couple of weeks should be watched for a possible bottom and a rally to take place short term. Expecting a good rally to last few weeks and it should be watched carefully along with the market breadth.
Lets take a look at the charts.
NYA – New York Stock Exchange Index:
This is a key index we like to follow. NYA has made a AB = CD pattern along with a double bottom as shown on the chart. This is a key pattern formation and the market did bounce up last Friday. Going into the next week, we should watch for further upside.
ES (March contract):
We like to take follow the ES contract for the S&P 500. Most traders use this as a trading vehicle. Here too we can see a AB = CD formation and a possible double bottom. Next week is a key week from the price action perspective. Further we have some timing cycles coming in by the end of the month.
ES Daily chart:
S&P 500 cash chart:
Initially, we had a target of 1802 to 1780 for the cash. The price did come pretty close. We have to watch carefully the price action next week, any weakness in the market place and we could complete this pattern.
S&P 500 cash daily chart:
Dow Jones Industrial Average:
Recently, Dow Jones Industrial Average has been acting stronger than the broad market S&P 500. We were looking for about 15000. However, when we look at the longer term weekly chart, we see that the market keeps on closing above the 78.6% Fibonacci retracement. If it gets above the 16500 level, it would be a bullish sign for the market. Only a break below the 15375 level as shown on the chart leads to the further downside.
Dow Jones Industrial Average weekly chart:
Wish every one a good day and prosperous trading!