sp 500 impending potential bullish breakout 2684662017

Short-term Technical Outlook (Wed, 18 Jan 2016)

(Click to enlarge chart)

What happened earlier/yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has continued to trade sideways above the 2257/54 medium-term pivotal support.

Please click here to recap our latest weekly technical outlook published on Monday, 16 January 2016.

Today’s key U.S economic data release/events

Consumer Price Index for Dec @1330GMT 2.1% y/y consensus
Industrial Production for Dec @1415GMT 0.4% m/m consensus
Fed’s Beige Book @1900GMT
Fed’s Yellen speech@2000GMT

Key elements

Since hitting a fresh all-time high of 2282 on 07 January 2017, the Index has started to consolidate below an intermediate resistance of 2277 (descending trendline from 07 January 2017 high). Interestingly, the consolidation has started to trace out a “higher low” as depicted by the shaded blue box right at the lower boundary of a minor ascending channel in place since 31 December 2016 low.
The hourly Stochastic oscillator still shows room for a further potential push down before it reaches an extreme overbought level. This observation suggests that price action of the Index can see a decline towards the 2265 intermediate support.
The next resistances after the 2282 current all-time high stands at 2285 follow by 2303 (1.00 Fibonacci projection from 31 December 2016 & the upper boundary of the minor ascending channel)

Key levels (1 to 3 days)

Intermediate support: 2265

Pivot (key support): 2257/54 (medium-term)

Resistances: 2277, 2285 & 2303

Next support: 2232

Conclusion

As long as the 2257/54 medium-term pivotal support holds, the Index may shape a bullish breakout above 2277 to see a further potential push up to target 2285 follow by 2303 next.

However, failure to hold above 2257/54 is likely to invalidate the preferred direct rise scenario to see a further decline to test the 31 December 2016 minor swing low area at 2232.

Charts are from City Index Advantage TraderPro

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