Monday’s outlook depended primarily on Greece, the Euro and the US dollar. All three co-operated on Monday once it was believed that a deal would be reached with Greece to manage their debt without defaulting. The rally on Monday took the NASDAQ and the Russell 2000 into more record highs.
Advance Decline Numbers for June 22 2015
Volume tumbled on Monday heading back down to 3 billion shares traded on New York. New highs though came in at 157 while new lows were 39. The new highs back above 150 are nice to see for further advances in the indexes. 66% of all volume was being traded to the upside..
Market Direction Closings For June 22 2015
The S&P closed at 2,122.85 up 12.86. The Dow closed at 18,119.78 up 103.83. The NASDAQ closed at 5,153.97 up 36.97.
Market Direction Technical Indicators At The Close of June 22 2015
Let’s review the market direction technical indicators at the close of June 22 2015 on the S&P 500 and view the market direction outlook for June 23 2015.
Market Direction Technical Analysis for June 22 2015
Stock Chart Comments:
Monday’s rally was decent although the S&P and Dow did close off their intraday highs. The close today placed the S&P well above the three major moving averages and above the important 2100 support level in the SPX. One thing to be aware of is that the 20 day simple moving average (SMA) has fallen below the 50 day moving average. At the present time this is not a concern, but it could become one so it bears watching.
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.
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 on June 18. The buy signal continued to strengthen on Monday.
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 and continued rising.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change signal is still pointing to a possible change in trend but the trend direction remains unknown.
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 still pointing up 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 still pointing up and recovered from the sharp turn down on Friday.
Market Direction Outlook for June 23 2015
The Greek question is not actually resolved. There are still wrangling that will take place and the rest of the week may see more fighting and rhetoric on this issue. However for Monday most investors were willing to give the Greek government the benefit of the doubt. They voted overwhelmingly positive on Monday.
That though can change on a dime. There is an old saying, about “selling the news”, meaning once the news is out and investors have nothing further to focus on for the Greek issue they may sell stocks lower. Tuesday then is as important as Monday was. Investors need to see stocks make further advances on Tuesday to keep this rally alive.
Technically the indicators are overwhelmingly positive for Tuesday on the S&P and Dow.
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)