sp 500 further potential downside below 2184 resistance 1828882016

Daily Outlook, Wed 31 August 2016

(Click to enlarge chart)

What happened earlier/yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has managed to drift down lower as expected right below the 2185 predefined intermediate resistance and printed a low of 2170 in the mid-U.S session.

Please click here for a recap on our previous daily short-term technical outlook/strategy.

Today key U.S. economic data releases/evens as follow:

• ADP Employment Change for Aug @1215 GMT (171K consensus)
• Chicago PMI for Aug @1345GMT (54.3 consensus)
• Pending Home Sales for Jul @1400GMT (0.6% m/m consensus)

Key elements

• The recent rebound from last Friday, 26 August low of 2160 is being capped by a short-term descending trendline resistance at 2184 which is in place since the minor swing high of 23 August 2016.
• The aforementioned descending trendline resistance of 2184 also confluences with the 76.4% Fibonacci retracement of the recent down move from 23 August 2016 high to last Friday, 26 August low of 2160.
• The daily (medium-term) RSI oscillator has just turned down right at its pull-back resistances which suggest that downside momentum has resurfaced to support a further potential down move in price action.
• The significant short-term support remains at 2155 which is the medium-term swing low area of 02 August 2016 and one of the potential projected end target of the intermediate term corrective decline wave 4/ based on the Elliot Wave Principal and fractal analysis.

Key levels (1 to 3 days)

Pivot (key resistance): 2184

Supports: 2168 & 2155

Next resistance: 2194 (medium-term pivot)

Conclusion

Maintain bearish stance with a tightened pivotal resistance of 2184 for a further potential down move to target the next supports at 2168 and 2155.

However, a clearance above the 2184 short-term pivotal resistance is likely to invalidate the preferred direct drop scenario for a further squeeze up towards this week medium-term pivotal resistance of 2194.

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