On Tuesday it was expected that stocks would close slightly higher. With investors on hold ahead of the Brexit vote on the 23rd, stocks are slowly climbing higher.
S&P Index Close
The S&P index climbed to over 2093 late afternoon on Tuesday but closed at 2088.90. Still, the close was an increase of 5.65 or a bit more than a quarter of a percent.
Dow Jones Index Close
The Dow Jones rose to 17,877.84 late afternoon and then moved lower into the close, staying up 24.86 to close at 17,829.73. This was a small gain of just 0.14% on the day.
NASDAQ Index Close
The NASDAQ had the toughest day of the three indexes. Volume was light but most of it was selling lower. The NASDAQ ended the day up 6.55 to close at 4,843.76.
Stock Market Outlook – Technical Indicators At The Close
Stock Market Outlook – Jun 21 2016
Stock Market Outlook: Chart Comments:
The S&P closed above the 50 day simple moving average (SMA) but below the 20 day moving average.
The Lower Bollinger Band is still turning up and is now above both the 200 and 100 day moving averages. This is often a bearish signal and the start of a Bollinger Bands Squeeze.
The Upper Bollinger Band is turning down. The Brexit vote, is results favor the “stay” side. should see the Bollinger Bands Squeeze end.
The closing candlestick on Tuesday was bullish for Wednesday.
The SPX continues to be led by the 50 day and then the 100 day followed by the 200 day. The 50 day moving average is pulling back.
Stock Market Outlook: Support and Resistance Levels:
These are the present support and resistance levels. These levels have not changed since January 2015.
2100 is still resistance and continues to keep the market advance well in check.
Very light support has been built around 2090.
2075 is light support.
Below that is 2050 which is light support.
There is also light support at 2025.
Better support is at 2000.
Weak support is at 1970 while stronger support is at 1956 and technically it is more important than 1970 for the market. 1940 is light support as is 1920. 1900 is more symbolic than anything else.
1870 is support. 1840 continues to be support. The 1820 level is light support. The strongest support level is at 1800.
1775 and 1750 are both critical support for the present bull market. While 1775 is important it is 1750 that is the bottom line.
A break of 1750 would mark a severe correction from the all-time high of 2134.72. This would be the biggest correction since the plunge in 2011 of a 20% pullback. A pullback to 1750 from the all-time high would be a drop of 384 points for a decline of 18%. A pull-back of that size would definitely stun investors and bring to question whether the bull market which started in 2009 is finished. From 1750 it is an easy slide to 1600 which was near the market top in 2007.
Stock Market Outlook Technical Signals
Momentum: For momentum I use a 10 period when studying market direction. Momentum is negative and moving sideways.
MACD Histogram: For MACD Histogram, I am using the Fast Points set at 13, Slow Points at 26 and Smoothing at 9. MACD (Moving Averages Convergence / Divergence) issued a sell signal on June 14. The sell signal remains weakly negative for stocks.
Ultimate Oscillator: The Ultimate Oscillator settings are: Period 1 is 5, Period 2 is 10, Period 3 is 15, Factor 1 is 4, Factor 2 is 2 and Factor 3 is 1. These are not the default settings but are the settings I use with the S&P 500 chart set for 1 to 3 months. The Ultimate Oscillator is positive and rising.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is positive and rising slightly as well.
Slow Stochastic: For the Slow Stochastic I use the K period of 14 and D period of 3. The Slow Stochastic tries to predict the market direction further out than just one day. The Slow Stochastic is pointing up for stocks at the close of trading today.
Fast Stochastic: For the Fast Stochastic I use the K period of 20 and D period of 5. These are not default settings but settings I set for the 1 to 3 month S&P 500 chart when I have it set for daily views. The Fast Stochastic is pointing up at the close of trading as well.
Stock Market Outlook for Tomorrow – Wednesday Jun 22 2016
For Wednesday stocks are set to continue to climb slowly. Many investors are taking profits but volume remains light.
Technically there are 4 positive signals that are all pointing to higher prices. There are 2 technical indicators which are pointing lower.
With the Brexit vote on June 23, I am expecting a fairly low volatile day with the indexes climbing a bit more.
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