sp 500 daily outlook wed 01 june 2016 potential push up first towards 2100110 resistance before anot

(Click to enlarge charts)

What happened earlier/yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has indeed shaped the expected bearish reaction below the 2110 pivotal resistance and almost hit the first downside target at 2085 (printed a low of 2088).

Please click on this link to recap our previous daily short-term outlook/strategy.

Today’s key U.S. economic data releases as follow:

• Markit  Manufacturing PMI for May @1345GMT
• ISM Manufacturing PMI for May @1400 GMT
• Fed’s Beige Book report @1800GMT

Key elements

• The descending trendline of 2100 from since 17 May 2016 high now also coincides with the recent shorter-term descending trendline from 30 May 2016 high (see hourly chart).
•  The hourly (short-term) Stochastic oscillator has just exited from the oversold region which highlights the risk of a further push up in price action at this juncture.
• The next short-term support after 2085 will be at the 2065/58 zone which is defined by the 50%/61.8%  Fibonacci retracement of the swift rally from 19 May 2016 low to 30 May 2016 high of 2105 and the pull-back support of the former short-term descending channel bullish breakout + minor swing high areas of 19/23 May 2016.

Key levels (1 to 3 days)

Intermediate resistance: 2100

Pivot (key resistance): 2110

Supports: 2085 & 2065/58

Next resistance: 2138

Conclusion

The Index may now see a short-term push up first to retest 2100 with a maximum limit set at the 2110 pivotal resistance before decline materialises to retest 2085 before targeting the next support at 2065/58.

However, a clearance above the 2110 pivotal resistance is likely to invalidate the short-term bearish scenario to see a further rally to reclaim 2138 (current all-time high/52-week high).

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