The outlook for Thursday June 18 2015 was for stocks to exhibit some weakness to start the day, after the Fed’s comments on Wednesday and then to move higher. There really wasn’t any weakness. The market jumped at the open and then climbed until it made a high shortly after noon hour of 2126.65. From there the market drifted sideways and closed down slightly at 2121.24 but definitely above the important 2100 level and above 2120.
The NASDAQ Index meanwhile made a new all-time high as did the Russell 2000. Normally the Russell 2000 peaks in Spring but this year the Russell 2000 has done well. Both of these indexes appear to be leading the market higher.
The rally was the result of the Fed dovish comments on Wednesday afternoon. Many analysts believe the US dollar will fall and this will improve revenue and earnings for companies which will drive stocks higher and finally break free of the sideways pattern that has developed this year. Whether that happens remains to be seen.
Advance Decline Numbers for June 18 2015
Volume in the afternoon picked up and New York had a better day with almost 3.6 billion shares traded. This use to be a normal daily number but this year volumes have fallen dramatically. Today’s volume was among the higher daily traded numbers this year. New highs finally punched through 100 and reached 111 while new lows fell back to 40. Of all the volume traded 70% was to the upside today. The bulls were in charge all day on Thursday.
Market Direction Closings For June 18 2015
The S&P closed at 2,121.24 up 20.80 for almost a 1% gain. The Dow closed at 18,115.84 up 180.10 or 1% but well off the highs for the day.. The NASDAQ closed at 5,132.95 up 68.07 for the day for a gain of 1.34% and setting a new all-time high.
Market Direction Technical Indicators At The Close of June 18 2015
Let’s review the market direction technical indicators at the close of June 18 2015 on the S&P 500 and view the market direction outlook for June 19 2015.
Market Direction Technical Analysis for Jun 18 2015
Stock Chart Comments:
Today’s big rally on the back of the Fed comments from yesterday pushed the S&P well above support at the 2100 level. The S&P closed just off the day’s highs. There is no support at the closing level. Support is back at 2100.
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 positive and rising due to today’s big rally.
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. Today MACD issued an unconfirmed buy signal. We will have to see what tomorrow brings before knowing whether a new buy signal is in place.
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 remained positive today and is rising, signaling the trend is back to up.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is changing and turned higher today. This could be the start of a possible up signal for stocks.
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 confirmed yesterday’s buy signal, today.
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 also confirmed yesterday’s buy signal.
Market Direction Outlook for June 19 2015
Today’s rally was big and whether it was the direct result of the Fed comments or not, really does not matter. The rally placed stocks within striking distance of new all-time highs again.
Technically there are many indicators pointing higher for stocks on Friday. I tend to believe them. Tomorrow though, stocks may pullback to start the day since the rally today was so strong. I am however expecting a positive close, even if only a slight one, on Friday. Therefore, expect weakness on Friday after today’s big rally, but it will be an opportunity to look for more trade possibilities.
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)