sp 500 daily outlook thurs 10 dec risk of further downside below 20562069 resistance 2646082015

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What happened yesterday

The U.S. SP 500 Index (proxy for the S&P 500) has broken below the 2050 weekly pivotal support and registered a daily close below it (close of 2048).

The preferred medium-term bullish move from 29 September 2015 has been put on hold and the Index now faces the risk of a retest on the 2018/1994 pull-back support area of the prior “Double Bottom” bullish breakout that occurred on 15 October 2015. Please click on this link for a recap on our previous daily outlook.

Key elements

• In the shorter-term (1 hour chart), the Index has broken below its former trendline support that has linked the higher lows since 04 December 2015 low now turns pull-back resistance at 2056.
• The Index has also started to evolve within a short-term descending channel (in pink) in place since 02 December 2015 high @4pm with its lower boundary (support) at around 2030.
• The lower boundary (support) of the aforementioned descending channel at 2030 also confluences closely with the 1.00 Fibonacci projection of the down move from 02 December 2015 high @4pm to 04 December 2015 low @3am projected from 07 December 2015 high @5pm

Key levels (1 to 3 days)

Intermediate resistance: 2056

Pivot (key resistance): 2069

Support: 2030

Next resistance: 2088

Conclusion

As long as the 2069 daily (short-term) pivotal resistance is not surpassed, the Index is likely to shape another down leg to target the short-term descending channel support at 2030.

On the flipside, a break above the 2069 pivotal resistance may see another volatile move for a squeeze up towards the short-term descending channel resistance at 2088.

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