sp 500 daily outlook tues 26 apr 2016 minor consolidationpush up is coming close to potential bearis

(Click to enlarge charts)

What happened yesterday/earlier

The U.S. SP 500 Index (proxy for the S&P 500 futures) has continued to undergo a slow drift upwards from yesterday low of 2077 in today’s European session. After today close, Apple (AAPL) will report its Q1 2016 earnings which is a heavy weight both in the S&P 500 and Nasdaq 100 (please click on this link for a detailed report published earlier on Apple).

Today we have a couple of U.S. economic data release as follow:

1)      Durable Goods Orders for Mar @1230 GMT

2)      S&P/Case-Shiller Home Price Indices for Feb @1300 GMT

3)      Markit Services PMI for Apr @1345GMT

4)      Consumer Confidence for Apr @1400GMT

Key elements

• The current rebound from yesterday’s low of 2077  is coming close to a 2100 resistance which is defined by a minor descending trendline from 21 April 2016 high and also coincides closely with the 61.8% Fibonacci retracement of the recent decline seen from 21 April 2016 high of 2111 to yesterday’s low.
• The hourly (short-term) Stochastic oscillator has traced out a bearish divergence signal which indicates a slowdown in upside momentum of the current up move.
• The key pivotal resistance remains at 2110 which is also now the pull-back resistance of the former short-term ascending channel bearish breakout. Click here for more details as per highlighted in our latest technical weekly outlook/strategy published yesterday).
• The next short-term support rests at 2065 which is defined by the minor swing low area of 18 April 2016 that also coincides closely with the earlier congestion area (the pink boxes) of the former descending range from 07 April to 11 April 2016.

Key levels (1 to 3 days)

Intermediate resistance: 2100

Pivot (key resistance): 2110

Supports: 2077 & 2065

Next resistances: 2120 & 2138

Conclusion

Bearish bias remains intact and any potential push up in price action is likely to be capped by the 2100 intermediate resistance with a maximum limit set at the 2110 pivotal resistance for a further potential down move to target the next support at 2065.

On the other hand, a break above 2110 pivotal resistance is likely to invalidate the bearish expectation to see an extension of the 3 month up move towards 2120 before targeting the significant 52-week week/current all-time high at 2138.

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this email, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs. All queries regarding the contents of this material are to be directed to City Index, a trading name of GAIN Capital Singapore Pte Ltd.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.