The outlook for Monday June 15 2015 was for stocks to close lower. Indeed during the day, the worries over Greece and the Euro dominated the market sentiment and pushed the S&P down to 2072.49 which broke through the technical support level of 2075. The break of 2075 though brought in buyers who bounced the S&P well off the intraday low to close at 2084.43 down 9.68 points or just about half a percent on the day. Let’s look at the day’s numbers and technical indicators to see what Tuesday is shaping up to look like.
Advance Decline Numbers for June 15 2015
Volume picked up today but only slightly and much of it after the S&P fell below 2075. 3 billion shares were traded and 73% of those were to the downside. New lows came in at 122 while new highs were just 45.
Market Direction Closings For June 15 2015
The S&P closed at 2,084.43 down 9.68. The Dow closed at 17,791.17 down 107.67. The NASDAQ closed at 5,029.97 down 21.13.
Market Direction Technical Indicators At The Close of June 15 2015
Let’s review the market direction technical indicators at the close of June 15 2015 on the S&P 500 and view the market direction outlook for June 16 2015.
Market Direction Technical Analysis for June 15 2015
Stock Chart Comments:
What may prove significant about Monday’s action is the drop of the S&P to below the 2075 level and its quick recovery. This fall below the 100 day moving average may have set the S&P up for a rebound rally for Tuesday. Volume picked up within minutes of the S&P falling below 2075. These types of moves often signal changes in trend.
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 very 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 negative and falling.
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 May 29. The sell signal is still active but it remains weak.
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 turned positive on Monday and is rising.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change is signaling that the market may be turning lower..
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 getting ready to issue a sell signal.
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 lower for stocks and issued a sell signal.
Market Direction Outlook for June 16 2015
Technically there is only one positive indicator, namely the Ultimate Oscillator. All the other indicators are continuing to signal more downside action ahead.
However the pullback today was quickly bought into which could give the market a further boost on Tuesday. The outlook for Tuesday then is either for stocks to attempt a rally or for more downside action to dominate. Technically the signal is for more downside action so if there is a bounce, look for it to fail.
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