sp 500 bullish tone remains intact above 2372 support 2689102017

Short-term Technical Outlook (Fri, 11 Mar 2017)

(Click to enlarge charts)

What happened earlier/yesterday

Since last Friday, 10 March 2017, we had highlighted that the corrective decline for the U.S. S&P 500 Index (proxy for the S&P 500 futures) from its 2400 all-time high area may have ended at the 10 march 2017 low of 2354 and the Index was expected to see the start of the upleg the complete the intermediate bullish impulsive wave 3/ to print a new all-time high within the ongoing “melt-up” phase.

So far, the Index has moved within our expectation reinforced by the post FOCM rally that elevate it to print at high of 2392 seen on 16 March 2017 (0.4% away from its current all-time high), European session before it consolidated yesterday. Click here & here for a recap our previous reports.

Key technical elements

• The daily RSI oscillator remains bullish above its ascending trendline support in place since 01 January 2017 which suggests that medium-term upside momentum remains of price action remains intact.
• Based on the Elliot Wave Principal and fractal analysis, the Index is now likely be undergoing the minute (lower) degree wave iv to complete the minor degree bullish impulsive wave 5 that has started on 10 March 2017 low of 2354. Interestingly, the extended 5^th wave target of the minute degree wave v now ends at around 2411 (1.00 time of the length of wave i to iii projected from a potential wave iv low of 2377). The current  minute degree 5^th wave target of 2411 confluences with our key medium-term resistance of 2411 that was defined two weeks ago from a Fibonacci projection of an earlier up move from 27 June 2016 low to 15 August 2016 high projected from 04 November 2014 low (see 1 hour chart).
• The hourly Stochastic oscillator has dipped back and it is now coming close to an extreme oversold level which suggests a potential revival of short-term upside momentum of price action.

Key levels (1 to 3 days)

Intermediate support: 2378

Pivot (key support): 2372

Next resistances: 2400 & 2411

Next support: 2354

Conclusion

We have tightened the short-term pivotal support to 2372 and expect the Index to shape another potential upleg to retest the current all-time high area of 2400 before targeting the next resistance at 2411.

On the other hand, failure to hold above 2372 is likely to put the bulls on hold to see a deeper slide to retest last Friday’s 10 March 2017 swing low of 2354.

Charts are from City Index Advantage TraderPro

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