sp 500 daily outlook 05 jan 2015 minor pull back towards 2010 support before potential upleg 1791692
<p>(Click to enlarge charts) Key elements The U.S. SP 500 Index (proxy for the S&P 500) has tested and managed to shape the expected rebound […]</p>
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Key elements
- The U.S. SP 500 Index (proxy for the S&P 500) has tested and managed to shape the expected rebound right at the key 1994 medium-term support (please click on this link to review the details as per highlighted in our latest weekly technical strategy published yesterday).
- Based on the Elliot Wave Principle, the Index is likely to have completed the 3rd wave, c/ of a potential five waves “Triangle” range configuration in place since 03 November 2015 at yesterday low of 1989. Current price is now undergoing the 4th wave, d/ which is a potential upside movement price action to retest the upper limit of range configuration (as depicted in dotted purple on the daily chart).
- The hourly (short-term) RSI oscillator has exited from its oversold region and remains above its support. In addition, it still has room for further upside before testing the trendline resistance.
- The intermediate resistance to watch is at 2046 which is defined by the 61.8% Fibonacci retracement of the downmove from 30 December 2015 to yesterday’s low of 1989.
Key levels (1 to 3 days)
Intermediate support: 2010
Pivot (key support): 1994 (medium-term)
Resistance: 2046
Next support: 1960
Conclusion
The Index may see minor pull-back first to test the 2010 intermediate support before another potential upleg materialises to target the 2046 resistance.
On the other hand, a break below the key 1994 pivotal support is likely to invalidate the recovery scenario to see a further plunge towards the next support at 1960.
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