sp 500 daily outlook for thurs 20 aug further potential downside below 20742081 1077722015
<p>(Click to enlarge charts) What happened yesterday The US SP 500 Index (proxy for the S&P 500) has broken below the 2078 lower neutrality level […]</p>
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What happened yesterday
The US SP 500 Index (proxy for the S&P 500) has broken below the 2078 lower neutrality level despite the initial positive reaction caused by the release of the U.S central bank, Federal Reserve minutes from the July meeting that indicated a less hawkish tone on monetary policy.
Please click on this link for a recap on our previous daily outlook.
Key elements
- The next significant support will be at 2058 which is defined by the ascending trendline joining the lows since 06 July 2015 @4am and a Fibonacci projection cluster (see 4 hour chart).
- The hourly Stochastic oscillator is now at its oversold region which highlights the risk of a short-term rebound in price action of the Index (see 1 hour chart).
- The short-term significant resistance is at 2081 which is the former horizontal support (see 1 hour chart).
Key levels
Intermediate resistance: 2074
Pivot (key resistance): 2081
Support: 2058
Next resistance: 2097
Conclusion
Bearish tone remains intact for the Index but it may stage a short-term push up towards the 2074 intermediate resistance with a maximum limit set at the 2081 daily pivotal resistance before another downleg occurs to test the 2058 support.
However, a break above the 2081 pivotal resistance is likely to negate the bearish tone for a further squeeze up to target the 2097 trendline resistance that is joining the highs since 18 August 2015 @8am.
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