The market has finally gotten a little bit of a boost in 2014 thanks to some earnings beat from the likes of Goldman Sachs and Morgan Stanley as well as improved results from companies like General Electric. Overall, more than half the companies that have reported have beat estimates.
However, the markets may be having a shaky 2014. But one noted technical analyst says we are still very much in a bull market.
Jeffrey Weiss, Chief Technical Analyst at Tejas Securities, says the charts of the market benchmark S&P 500 index indicate a couple of support ranges a bit below where we are today. In other words, as long as we stay above these support lines, the long-term bullish trend will continue.
"It's somewhat remarkable that for a market that's traveled the distance over the last 295 days or so that this bull has…, that we could define support so relatively close to current quotes," says Weiss looking at a 13-year chart on the S&P 500. "That is a trend line going back to the spring of 2001, which currently resides just over 1,800 on the S&P."
That 1,800 level is important because that says whether the market is still bullish or bearish.
"From the bears' standpoint, they're going to need to give us several closes out at or below 1,800 as things stand now to start to infiltrate the long-standing multi-month bull trend," says Weiss.
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A short-term chart, going back just before the market bottomed out half a decade ago, shows a second important level, according to Weiss. Charting a line across the various highs since 2008 – and through which the S&P 500 broke in last quarter of 2013 – Weiss says another significant level becomes apparent. "That line represents secondary investment support on a daily closing basis for the S&P 500 index," says Weiss. "It's currently situated roughly in the 1,765 to 1,770 vicinity."
Weiss remain bullish as long as the 1,800 and 1,765 to 1, 770 support levels hold.
"The bears are going to need to infiltrate at least one, preferably more of those lines to start to dent the trend," says Weiss. "For starters, they need to give us at least back-to-back closes at or below the 1,800 area."
To see more of Weiss' charts and how he arrived at these critical support levels, watch the video above.
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