sp 500 daily outlook wed 26 aug 1940 needs to be taken out to see further potential upside 112632201
<p>(Click to enlarge charts) What happened yesterday The U.S. SP 500 Index (proxy for the S&P 500) had a dramatic late sell-off and broke below […]</p>
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What happened yesterday
The U.S. SP 500 Index (proxy for the S&P 500) had a dramatic late sell-off and broke below the 1890 pivotal support. It tumbled close to the Monday, 24 August 2015 low of 1835
Please click on this link for a recap on our previous daily outlook.
Key elements
- During today’s Asian and European session, the Index has managed to hold above Monday, 24 August 2015 low of 1835 which translates into a positive psychological factor as demand is still present despite the “fear” factor created on yesterday’s drastic sell-off in the U.S. closing session.
- From the low of 1835, the Index appears to be evolving into a “Symmetrical Triangle” consolidation pattern with upper (resistance) and lower (support) boundaries at 1940 and 1854 respectively (see 1 hour chart).
- The next resistance to watch will be at the1980/2000 zone (50% Fibonacci retracement of the recent steep decline from 20 July 2015 high to the current 24 August 2015 low & the former support congestion zone from 16 December 2014 to 02 February 2015 (see daily chart).
- The intermediate term Stochastic oscillator remains positive as the it continues to inch upwards form its oversold region which reinforces the upside momentum revival scenario (see daily chart).
Key levels (1 to 3 days)
Pivot (key support): 1854
Resistance: 1940, 1980 & 2000
Next support: 1835 & 1820
Conclusion
The Index needs to break above 1940 in order to trigger a further potential push up to target 1980 and even 2000 next.
However, failure to hold above the 1854 pivotal support is likely to see the continuation of the waterfall slide to retest the 24 August 2015 low of 1935 before 1820 (“Tweezer bottom” of 15 & 16 October 2014) next.
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