sp 500 daily outlook wed 06 jan 2016 still above 1994 key medium term support 1791962016
<p>(Click to enlarge charts) What happened yesterday The U.S. SP 500 Index (proxy for the S&P 500) has inched lower but managed to hold above […]</p>
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What happened yesterday
The U.S. SP 500 Index (proxy for the S&P 500) has inched lower but managed to hold above the key 1994 medium-term support as the market continued to churn within a sideways environment.
Please click on this link for a recap on our previous daily outlook/strategy.
Key elements
- In today’s European session, the Index has tried another attempt to test the key medium-term support at 1994.
- Interestingly, the hourly (short-term) RSI oscillator is still holding above its supports and traced out a bullish divergence signal. These observations suggest the strength of the current downside momentum has started to abate.
- Graphically, the Index has traced out a short-term impending bullish “Double Bottom” chart configuration which suggests a potential bullish reversal is round the corner after two days of decline.
- The intermediate resistance now stands at 2023 which is the minor swing high formed yesterday, 05 January 2015.
Key levels (1 to 3 days)
Pivot (key support): 1994 (medium-term)
Resistance: 2023 & 2046
Next support: 1960
Conclusion
As long as the 1994 key medium-term pivotal support holds, the Index is likely to see a push up to retest the minor swing high at 2023 in the first instance. Only a break above 2023 may trigger a further upside movement towards the next resistance at 2046 (61.8% Fibonacci retracement of the downmove from 30 December 2015 to 5 January 2016 low of 1989).
However, failure to hold above the key 1994 pivotal support is likely to invalidate the push up scenario for a further plunge towards the next support at 1960.
Disclaimer
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