sp 500 daily outlook wed 10 mar 2016 1979 is the short term key support to watch for potential push

(Click to enlarge charts)

 

What happened yesterday/earlier

The U.S. SP 500 Index (proxy for the S&P 500 futures) has managed to inch slightly higher from 09 March 2016 low of 1977 to print a high of 1996 in today’s 10 March 2016 Asian session (up by 0.9%).

We have highlighted in our earlier short-term daily outlook/strategy that the pull-back in price action seen from last Friday, 04 March 2016 high of 2009 is likely to have ended. (Please click this link for a recap).

Key elements

• Current price action has tested but continued to hold at the lower boundaries of the bearish “Ascending Wedge” and the ascending channel in place since the start of this on-going countertrend rally cycle from 11 February 2016 low of 1807. Right below these lower boundaries, there is another level of support at 1979 which are the two minor swing low areas of 09 March 2016 @4am and 09 March 2016 @11am.
• The upper limit of the bearish ‘Ascending Wedge” stands at the 2020/30 zone which confluences with a Fibonacci cluster and the trendline resistance from 02 December 2015 high.
• The hourly (short-term) Stochastic oscillator has dipped back into its oversold region which suggests a potential upturn in price action is round the corner.
• The key support to maintain this countertrend rally cycle remains at 1970/63 which is defined by the former swing high area of 26 February 2016 that was tested and managed to hold the decline seen on 02 March 2016 @11pm as well as the pull-back from last Friday, 04 March 2016 high of 2009.

Key levels (1 to 3 days)

Intermediate support: 1979

Pivot (key support): 1970/63

Resistances: 2009 & 2020/30

Next support: 1922

 Conclusion

We maintain our bullish bias on the Index to shape the expected last upleg in this second phase of the countertrend rally that started from 24 February 2016 low of 1890 (click here to recap our latest weekly outlook/strategy). Today’s short-term key intermediate support will be at 1979 where the Index is likely to shape a push up to retest last Friday minor swing high at 2009 in the first step before the medium-term upside target of 2020/30 (upper limit of the bearish “Ascending Wedge”).

However, failure to hold above the 1970/63 pivotal support is likely to invalidate the final push up scenario to kickstart a potential multi-weeks decline towards the next support at 1922 in the first round of downside movement.

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