sp 500 weekly outlook 30 nov to 04 dec bullish tone remains intact above 20702062 key support 264392

(Click to enlarge charts)

What happened last week

The U.S. SP 500 Index (proxy for the S&P 500) has shaped a pull-back but held above the lower limit of the 2070/2062 key weekly pivotal support zone as expected in a Thanksgiving holiday shortened week.

Please click on this link for a review on our prior weekly outlook/strategy.

Key Economic Data Release/Events

• 30 Nov (Mon) – Chicago Purchasing Manager’s Index for Nov @1445GMT
• 30 Nov (Mon) – Pending Home Sales for Oct @1500GMT
• 01 Dec (Tues) – Markit Manufacturing PMI for Nov @1445GMT
• 01 Dec (Tues) – ISM Manufacturing PMI for Nov @1500GMT
• 02 Dec (Wed) – ADP Employment Change for Nov @1315GMT
• 02 Dec (Wed) – Fed’s Yellen Speech @1600GMT
• 02 Dec (Wed) – Fed’s Beige Book @1900GMT
• 03 Dec (Thurs) – Markit Services PMI for Nov @1445GMT
• 03 Dec (Thurs) – ISM Non-Manufacuring PMI for Nov @1500GMT
• 04 Dec (Fri) – Nonfarm Payrolls for Nov @1330GMT

Key elements

• Current price action has started to evolve within a steeper short-term bullish ascending channel (in orange) in place since 16 November 2015 with its lower boundary acting as a support at 2084 (see 4 hour chart).
• The significant medium-term support remains at the 2070/2062 zone which is defined by the former congestion area linking the lows of 27 July and 12 August 2015, 200-day Moving Average and a Fibonacci retracement cluster (see daily chart).
• The daily (medium-term) RSI oscillator remains bullish above its support and the 50% neutrality level. In addition, it still has room for further potential upside before reaching its extreme overbought level. These observations suggest that upside momentum remains intact (see daily chart).
• The key medium-term resistances remain at 2138 (current all-time high) which is the multi-month range top in place since May 2015 follow by 2165, the upper boundary of the short-term ascending channel in place since 16 November 2015 and a Fibonacci projection cluster (see daily & 4 hour charts).

Key levels (1 to 3 weeks)

Intermediate support: 2084

Pivot (key support): 2070/62

Resistance: 2138 & 2165

Next support: 2040 & 1994

Conclusion

Technical elements remain positive and as long as the 2070/2062 weekly pivotal support holds, the Index is likely to shape a further potential rally to retest the 2138 range top before targeting the next resistance at 2165.

On the other hand, a crack below the 2070/2062 pivotal support may negate the bullish tone to see a slide to test the lower boundary of the medium-term ascending channel (in dark blue) at 2040. Only a clear break below 2040 is likely to trigger a further decline towards 1994, the critical pull-back support of the “Double Bottom” bullish breakout.

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