I've been doing some research on technical analysis, so I thought I'd share just for fun.
Here is a chart of the S&P 500 with long moving averages (350 day and 1000 day) zoomed out over the past 6 years. If you can't see the Simple Moving Averages, you will have to add them, or check out the pictures below.
If you look at the top (red) line on the far right of the chart, you will see that the S&P500 has met consistent resistance at around 1200 since July of this year. You can zoom in to a three month view to see that every time the graph crosses 1200, it dips below that level shortly thereafter. The bottom (green) line shows the lower point of long-term support. Right now, we're looking at testing the 1110 support level, which is conveniently smack in the middle of the red and green lines (see the second picture below). You can see that the graph is ubiquitously close; only about 30 bucks off this level. If we bounce back off 1110, my guess is that we'll likely test 1200 again. But if the market plows through the 1110 level, the next stop is to test the 950 level, which you'll notice was the resistance level during the 2008 crash. If we plow through that support level, I don't want to think about it yet.
So, here are the pictures of what I'm talking about. The first picture shows the long term resistance level of 1200, and how the S&P has interacted with it over the past 4 years. Since the Financial system nearly blew-up in 2008, even money printing couldn't stop that resistance level. We broke through 1200 in 2010, but didn't break 1400 for any significant amount of time.
Hope this can help someone out there. If you have questions, I recommend Investopedia as an excellent resource. Remember, I'm still very new at this, so don't count on this stuff as investment advice. I'm just putting into practise what I am learning, so I could be wrong about my analysis and could have screwed up some numbers.
Here is a chart of the S&P 500 with long moving averages (350 day and 1000 day) zoomed out over the past 6 years. If you can't see the Simple Moving Averages, you will have to add them, or check out the pictures below.
If you look at the top (red) line on the far right of the chart, you will see that the S&P500 has met consistent resistance at around 1200 since July of this year. You can zoom in to a three month view to see that every time the graph crosses 1200, it dips below that level shortly thereafter. The bottom (green) line shows the lower point of long-term support. Right now, we're looking at testing the 1110 support level, which is conveniently smack in the middle of the red and green lines (see the second picture below). You can see that the graph is ubiquitously close; only about 30 bucks off this level. If we bounce back off 1110, my guess is that we'll likely test 1200 again. But if the market plows through the 1110 level, the next stop is to test the 950 level, which you'll notice was the resistance level during the 2008 crash. If we plow through that support level, I don't want to think about it yet.
So, here are the pictures of what I'm talking about. The first picture shows the long term resistance level of 1200, and how the S&P has interacted with it over the past 4 years. Since the Financial system nearly blew-up in 2008, even money printing couldn't stop that resistance level. We broke through 1200 in 2010, but didn't break 1400 for any significant amount of time.
Hope this can help someone out there. If you have questions, I recommend Investopedia as an excellent resource. Remember, I'm still very new at this, so don't count on this stuff as investment advice. I'm just putting into practise what I am learning, so I could be wrong about my analysis and could have screwed up some numbers.
