The outlook for Thursday was for some weakness to begin to be seen in stocks but the outlook remained up. Today the NASDAQ made another new all-time high and the S&P is within 10 points of a new high. The Dow is about 230 points away from its high. Pretty amazing considering that just 7 days ago indexes looked destined to break lower.
Advance Decline Numbers for July 16 2015
Volume was steady today at 3.2 billion shares traded. Up volume slipped just slightly to 62% of all trades but new highs rose to 143. New lows however also rose climbing to 117. It was a mixed day for volume but in general volume still points to the rally continuing.
Market Direction Closings For July 16 2015
The S&P closed at 2,124.29 up 16.89. The Dow closed at 18,120.25 up 70.08. The NASDAQ closed at 5163.18 up 64.24.
Market Direction Technical Indicators At The Close of July 16 2015
Let’s review the market direction technical indicators at the close of July 16 2015 on the S&P 500 and view the market direction outlook for July 17 2015.
SPX Market Direction Technical Analysis for July 16 2015
Stock Chart Comments:
The S&P shrugged off the doji-cross candlestick warning today and moved higher. The advance today placed the S&P within easy striking distance of a new all-time high. The 20 day simple moving average (SMA) has turned up and is climbing back toward the 50 day moving average. A break above the 50 day will signal a major move higher for the S&P.
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 is light support. 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 positive but turned 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 buy signal July 14. The up signal is gaining 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 is overbought.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal has changed to up.
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 up for stocks and it is overbought.
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 and is also overbought.
Market Direction Outlook for July 17 2015
The market is overbought and today it closed right near the highs for the day. As well the doji-cross signal remains with the market at present. The doji-cross candlestick often signals a downturn more than a single day away. That means the S&P could turn lower on Friday thanks to the doji-cross candlestick.
The outlook for stocks is still higher but the overbought condition could stop the present rally until they are resolved. For Friday look for stocks to be weak at the open and into the morning. The close though could be positive especially as Friday is the options expiry date for the month.
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