S&P 500 forecast for the week of October 13, 2014, Technical Analysis

The S&P 500 initially tried to rally during the course of the week, but found the 1980 level to be far too resistive. With that, we ended up falling rather significantly, closing at the 1906 level. With that, we are starting to test the 1900 support barrier, as well as the uptrend line that the market has been working against. The fact that we broke down below the bottom of a weekly hammer from the previous week of course is a very negative sign, and it must be said that global markets in general a very vulnerable. With that, it does not surprise us at all if this market closes on a daily close below the 1900 level, which is reason enough for us to start selling.

We believe that this market may do better than some of the European indices, but that doesn’t necessarily mean that it has to do well. After all, the European indices are a lot of trouble, and as a result it’s very likely that the concerns about Europe will continue to weigh upon the S&P 500.

The Federal Reserve recently released its minutes from the previous meeting, and it was stated that global growth concerns weigh upon some of their positions on interest-rate. Because of that, it appears that the Federal Reserve continues to worry about the European Union, and that of course will continue to affect how equities in general do.

The fact that the Federal Reserve and other central banks are starting to worry about global growth again is of course very bad for equities in general. With that, it’s not that big of a surprise to see these stocks fall, as the S&P 500 is simply representative of risk-taking and global economic outlook in general. Remember, most of the S&P 500 companies anymore are global in their nature, so it makes sense that we continue to see them show essentially what would be a barometer of the world’s economic health. At this point in time, we don’t have a candle that’s worthy of buying.