The outlook for the final day of June was for stocks to attempt a bounce but fail. That pretty well sums up the day but there were signs today that investors are perhaps getting over the shock of Greece defaulting on its IMF obligation. With that being the case let’s look at today’s action to see if we can get a better idea of what to expect for the first day of July.
Advance Decline Numbers for June 30 2015
The first thing to note is that with the indexes still lower, volume picked up especially later in the day. Almost 4.1 billion shares were traded with 53% of the volume being traded higher and 45% lower.
New lows were at 229 and new highs just 23 which is quite bearish but volume flowing in the last hour and a half was fairly bullish which often indicates that investors believe a bottom, even a temporary one, is being put in place. If this is the case it is because a lot of investors felt that stocks were going to bounce back as they have done so many times before over the last 6 months.
Market Direction Closings For June 30 2015
The S&P closed at 2,063.11 up 5.47. The Dow closed at 17,619.51 up 23.16. The NASDAQ closed at 4,986.87 up 28.40.
Market Direction Technical Indicators At The Close of June 30 2015
Let’s review the market direction technical indicators at the close of June 30 2015 on the S&P 500 and view the market direction outlook for July 1 2015.
Market Direction Technical Analysis for June 30 2015
Stock Chart Comments:
The rally may not have appeared as much, but it did keep the S&P above the 200 day moving average and reached 2074.28 during the day which almost broke into the 2075 support level. The 2050 support is still holding on and has yet to be tested. While the 20 day SMA is still falling lower, the 50 day and 100 day are only just starting to weaken.
Support and Resistance Levels:
These are the present support and resistance levels. These levels have hardly changed in months as the market continues to move sideways.
2100 was light support and is now light resistance. Stocks will have to stay above it to change it back to solid support and convince investors that the market has staying power and will push well beyond 2100. That still does not appear to be the case.
2075 was light support and is now light resistance. Below that is 2050 which is also light support. Stronger support is at 2000 which has repeatedly held the market up throughout each pullback in January and February.
Weak support is at 1970. Stronger support is at 1956.
1870 and 1840 are both levels with strong enough support to delay the market falling and should see a sideways action attempt while investors decide whether to sell or buy.
The other two support levels are 1775 and 1750. I have explained that these two are 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 most recent high. This would be the biggest correction since April 2012. A pull-back of that size would definitely stun investors and bring to question whether the bull market is finished.
Momentum: For Momentum I am using the 10 period. Momentum remained negative today..
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 29 which was confirmed today..
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 deeply oversold and trying to bounce.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is negative but not falling which normally is a signal that there is not much downside at the present time in the index.
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 signaling lower for stocks.
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 it is set for daily. The Fast Stochastic is also signaling lower for stocks but bounced from oversold today and could issue a buy signal as soon as Wednesday if the market tries to bounce again.
Market Direction Outlook for July 1 2015
July has been a good month for stocks in general and the Dow in particular. Over the last 25 years the Dow has been up 20 times on the first day of July. This is a short week and that often assists in keeping stocks positive into the end of the week. With unemployment for June out on Thursday the market may also try to stay positive but not bounce by much, however I think the market will try for a second bounce on Wednesday.
The technical indicators are still overly negative but there are some signals that Tuesday’s bounce was just to put in place a temporary bottom and the volume rise in the last hour and a half was fairly bullish. Stocks may want to try to bounce for a second time on Wednesday but even if they do not, I am expecting a positive close as investors await June’s unemployment report.
Stay FullyInformed With Email Updates
Market Direction Internal Links
Profiting From Understanding Market Direction (Articles Index)
Understanding Short-Term Signals
Market Direction Portfolio Trades (Members)