sp 500 daily outlook tues 19 jan 2016 watch the 1915 resistance for potential final push down 179387
<p>(Click to enlarge charts) Key elements The U.S. SP 500 Index (proxy for the S&P 500) has appeared to be evolving within an “Expanding Wedge” […]</p>
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Key elements
- The U.S. SP 500 Index (proxy for the S&P 500) has appeared to be evolving within an “Expanding Wedge” configuration in place since 13 January 2015 high.
- The appearance of such “Expanding Wedge” configuration suggests that the downtrend in place since 30 December 2015 is coming to an exhaustion point where a mean reversion/”snap-back” in price action is likely to occur.
- The price action is now testing the upper limit (resistance) of the ‘Expanding Wedge” at 1915 which also confluences with a Fibonacci cluster (1.00 Fibonacci projection from 16 January 2016 low + 23.6% Fibonacci retracement from 30 December 2015 high).
- The lower limit (support) of the “Expanding Wedge” rests at 1935 which is also the neckline support of the impending “Double Top” bearish configuration (see daily chart).
- The hourly (short-term) Stochastic oscillator has reached its extreme overbought level which suggests limited upside potential.
Key levels (1 to 3 days)
Pivot (key resistance): 1915
Support: 1857 & 1835/20
Next resistance: 1935/54
Conclusion
As long as the 1915 short-term pivotal resistance is not surpassed, the Index may see a potential final push down to retest last Friday, U.S. session low at 1857 and even the 1835/20 support.
However, a clearance above the 1915 pivotal resistance is likely to invalidate the bearish move for a squeeze up towards the next resistance at 1935/54.
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