I had anticipated a bounce attempt to start off Monday morning. This did not happen and with selling pressure mounting in the noon hour, the S&P slipped below the 100 day moving average into the close. The intraday outlook had been for the SPX to close near the 2080 level. By the close the SPX was down at 2079.28 for a decline of 0.65%.
Advance Decline Numbers for June 8 2015
Monday saw 3 billion shares traded with 72% of that volume moving to the downside. New lows came in at 127 while new highs were at 67. For the first time in weeks, the new lows have broken 100. More downside lies ahead this week.
Market Direction Closings For June 8 2015
The S&P closed at 2,079.28 down 13.55. The Dow closed at 17,766.55 down 82.91. The NASDAQ closed at 5,021.63 down 46.83.
Market Direction Technical Indicators At The Close of June 8 2015
Let’s review the market direction technical indicators at the close of June 8 2015 on the S&P 500 and view the market direction outlook for June 9 2015.
Market Direction Technical Analysis for June 8 2015
Stock Chart Comments:
Two important aspects to the S&P on Monday were the close below the 100 day moving average and the close which was below and outside the Lower Bollinger Band. Both of these are negative for the market but also point to an intraday oversold indication. The close below 2080 sets the S&P up for a test on Tuesday of light support at 2075.00.
Support and Resistance Levels:
These are the present support and resistance levels.
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 lower.
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 continues to grow in 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 negative and falling quickly.
Rate of Change: Rate Of Change is set for a 21 period. The rate of change is signaling that a downtrend is now in place for the market direction.
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 signaling down for stocks and is deeply 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 down for stocks and is also deeply oversold.
Market Direction Outlook for June 9 2015
Technically all the indicators are pointing to further downside in the S&P for later this week. Meanwhile with the Slow Stochastic and Fast Stochastic both signaling deeply oversold, I would expect a bounce attempt Tuesday morning and then more selling and a negative close. Stocks are set to move lower before they attempt a rebound rally.
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)