The Stock Market Outlook for Wednesday was for a dip lower in the morning and then the rally to continue and the market to close higher again on Wednesday.
The close though was much higher than I anticipated and the rally broader and stronger.
S&P Index Close
The S&P index moved higher throughout the day with no pullback in the morning as expected. The close was at 2070.77 for a 34.68 point gain. This is a rise of 1.7% eliminating much of the decline from Friday and Monday.
Dow Jones Index Close
The Dow Jones Index rose another 284.96 points to 17,694.68 up 1.64%. It is now just over 200 points away from reaching 18000 once more.
NASDAQ Index Close
The NASDAQ rally was a bit choppier but without any dip in the morning or afternoon. The index again beat the other two major indexes closing up 1.86%. The NASDAQ gained 87.38 points to close at 4,779.25.
Stock Market Outlook – Technical Indicators At The Close
Stock Market Outlook – June 29 2016
Stock Market Outlook: Chart Comments:
The S&P closed above the 100 and 200 day moving averages but below the 20 and 50 day moving averages.
The 20 day simple moving average (SMA) is turning back up which could mean no sell signal as it appears it may not cross below the 50 day moving average.
The closing candlestick is bullish for Thursday but often indicates a pullback or period of weakness for the following day.
The close on Wednesday was back to the 2070 valuation, well above the 2050 light support level and just below the 2075 resistance level.
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 primary resistance and continues to keep the market advance well in check.
2090 was very light support and is now light resistance.
2075 is light resistance.
Below that is 2050 which is light support.
2025 is better support than 2050 through to 2090.
2000 is primary support.
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 back rising. It is ready to turn positive.
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 was declining in strength on Wednesday.
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 negative and rising and ready to turn positive.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is negative and trying to rise.
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 has a buy signal in place for Thursday.
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 has a buy signal in place as well.
Stock Market Outlook for Tomorrow – Thursday Jun 30 2016
For Thursday stocks look set to take a breather. A pullback should be expected and should be used as an opportunity since the chance of a major drop is minor at this point. The Brexit affair appears over for now.
On Thursday look for the market to move lower, but not plunge. The close should be negative on Thursday or if not, then almost unchanged from Wednesday.
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