sp 500 daily outlook thurs 27 aug potential push up towards 19802000 before bearish reaction occurs
<p>(Click to enlarge charts) What happened yesterday The U.S. SP 500 Index (proxy for the S&P 500) has broken the 1940 upside trigger level. Yesterday, […]</p>
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What happened yesterday
The U.S. SP 500 Index (proxy for the S&P 500) has broken the 1940 upside trigger level. Yesterday, “fightback” rally of 4% is going down the records as a biggest single day rally since November 2011.
Please click on this link for a recap on our previous daily outlook.
Key elements
- The Index has broken above the former short-term resistance joining the highs since 25 August 2015 @12am now turns pull-back support (in dotted green) at 1938 (see 1 hour chart).
- The intermediate resistance remains at the1980/2000 zone (50% Fibonacci retracement of the recent steep decline from 20 July 2015 high to the current 24 August 2015 low & the former support congestion zone from 16 December 2014 to 02 February 2015 (see daily chart).
- The intermediate and short-term Stochastic oscillators still has some room to move up before reaching their respective extreme overbought levels. This observation suggests that price action of the Index still has some upside potential left (see daily & 1 hour charts).
Key levels (1 to 3 days)
Pivot (key support): 1938
Resistance: 1980 & 2000
Next support: 1920 & 1880
Conclusion
As long as the 1938 daily pivotal support holds, the Index is still likely to see a final potential push up to target 1980 and even 2000 next before a bearish reaction occurs.
On the other hand, a break below the 1938 pivotal support may expose the 1920 support. Only a violation below 1920 is likely to trigger a deeper slide to retest the trendline support in place since 24 August 2015 low now at 1880.
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