Last week was quite the roller coaster for investors but by the end of the week the S&P had moved back above the 200 day moving average and was holding the 2075 support level. Considering that the 52 week high is 2134.72, the S&P is not really that far below it. The VIX Index pulled back 15.72% on Friday but at $16.83 still, there is a lot of volatility sitting in the market at present.
Advance Decline Numbers for July 10 2015
Friday’s big rally didn’t draw in investors as previous rallies have done. Just 3.07 billion shares traded on Friday. 78% of all trades though were to the upside and new lows that had been running above 200 closed at just 58 on Friday.
Market Direction Closings For July 10 2015
The S&P closed at 2,076.62 up 25.31. The Dow closed at 17,760.41 up 211.79. The NASDAQ closed at 4,997.70 up 75.30.
Market Direction Technical Indicators At The Close of July 10 2015
Let’s review the market direction technical indicators at the close of July 10 2015 on the S&P 500 and view the market direction outlook for July 13 2015.
Market Direction Technical Analysis for July 10 2015
Stock Chart Comments:
The S&P rally recovered 1.23% and closed near the highs of the day. The 20 day simple moving average (SMA) continued to fall on Friday but the S&P is back above the 200 day moving average.
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 is light support. 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 is still negative but rising.
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. The sell signal is active and losing strength.
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 negative but rising.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal turned back to sideways once again signaling not a lot of further downside lies ahead yet.
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 down for stocks and is oversold..
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 signaling up for stocks.
Market Direction Outlook for July 13 2015
Greece may dominate the news on Monday as the EU has basically given an ultimatum to the Greek government. At present this looks more and more like Greece may end up having to leave the EU and Euro. That could cause stocks to trend more sideways to start the week. On Monday stocks look set to open a bit lower after Friday’s strong rise however stocks should then gain traction and continue to climb as long as the Shanghai and Asian markets close positive. I would not expect a large rally on Monday but simply a positive close of several points. Greece and the fate of the Euro will keep a lid on any extension of the rally from Friday. Tuesday could see a bit more selling. I’ll know more about Tuesday after Monday’s market closes.
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