sp 500 daily outlook fri 19 feb 2016 potential final push up above 19091900 support 1798032016

(Click to enlarge charts)

What happened yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has traded sideways as it has erased off its gains seen in the European session to print a low of 1915 which is just above the 1909/1900 short-term pivotal support.

*Do take note that today will be U.S. options expiry for equities, equity indices and ETFs, thus do expect higher volatility.

Please click on this link for a recap on our previous daily outlook/strategy.

Key elements

• The Index has continued to evolve within a short-term bullish ascending channel with its lower boundary (support) now at 1909.
• The short-term ascending channel support also confluences closely with the 23.6% Fibonacci retracement of the current rally from 11 February 2016 low to yesterday’s high of 1937.
• Based on the Elliot Wave Principal, the Index is likely to be forming the final 5^th wave (v) to complete the bullish impulsive wave structure of a/ (minor degree) that started from 11 February 2016 low of 1807. The potential wave v targets stands at 1947/54 and 1961 which is defined by a Fibonacci projection cluster from different swing lows (1.00 projection from 17 February 2016 low @12am & 0.764 projection from 18 February 2016 low @4pm). Thereafter, a corrective wave b/ is likely to unfold to retrace the rally from 11 February 2016 low.
• The lower limit of the 1947/54 wave v target coincides closely with the swing highs of 13 January 2016 and 01 February 2016. The upper limit of the wave v target at 1951 confluences now with the upper boundary (resistance) of the short-term ascending channel in place since 11 February 2016 low.

Key levels (1 to 3 days)

Pivot (key support): 1909/1900

Resistances: 1947/54 & 1961

Next support: 1874

Conclusion

As long as the 1909/1900 short-term pivotal support holds, the Index is likely to stage the potential final push up towards our expected medium-term upside target of 1947/54 set for this week with a maximum limit at the 1961 level (to complete the bullish wave a/).

However, failure to hold above the 1909/1900 short-term pivotal support is likely to invalidate the on-going rally to see the start of  a decline (corrective wave b/) towards the next support at 1874.

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