Daily Outlook, Fri 07 July 2016
(Click to enlarge charts)
What happened earlier/yesterday
The U.S. SP 500 Index (proxy for the S&P 500 futures) has started to stage a decline in yesterday, 07 July U.S. session as it printed a low of 2089. However, it failed to meet our first short-term downside target/support at 2085 and traded sideways.
Even though, it has remained below the predefined short-term pivotal resistance of 2021 but conviction has been reduced on our initial expectation of a short-term setback scenario, More details as per discussed below.
Please click on this link for a recap on our previous daily short-term technical outlook/strategy.
Today key U.S. economic releases:
- Nonfarm payrolls for Jun @1230GMT (175K estimates)
- Baker Hughes U.S. Oil Rig Count @1700GMT
Key elements
- Since hitting a low 2089 seen yesterday, the Index has started to inch higher back to the 2100 handle and supported by a short-term ascending trendline (see 1 hour chart).
- Based on intermarket analysis, the DAX, Nikkei 225 and Hang Seng have all started to stage a rebound from/above their short-term pivotal supports at 9310, 15120, and 20250 respectively. Since all major stock indices move in similar fashion most of the time, thus it is not so convincing at this juncture for the S&P 500 to stage a setback.
- On the topside, the key resistance to watch for the U.S. SP 500 Index remains at 2100/2121 which is the range top that has capped prior advances since the all-time high printed on May 2015.
Key levels (1 to 3 days)
Resistances: 2121 & 2138/44
Supports: 2089 & 2066
Conclusion
Mixed elements. Our earlier conviction for a potential short-term setback scenario has been reduced, thus it will more prudent to turn neutral in terms of directional bias at this juncture. Only a break above the 2121 resistance is likely to trigger a further potential rally to retest the current all-time high level area at 2138/44.
On the flipside, a break below the 2089 support may reinstate the setback scenario for a further potential slide to target the next support at 2066.
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