sp 500 further potential weakness below 2373 before recovery 1846072017

Short-term Technical Outlook (Thurs, 09 Mar 2017)

(Click to enlarge charts)

What happened earlier/yesterday

The U.S. S&P 500 Index (proxy for the S&P 500 futures) had continued to inch downwards below 2370 and gave back all the previous gains that were triggered by U.S. President Trump’s State of The Union speech.

Key technical elements

• The significant short-term resistance stands at 2373 which is defined by the minor swing high area of 07 March/08 March 2017 and the upper boundary of the short-term descending channel from 04 March 2017 minor swing high.
• Based on the Elliot Wave Principal and fractal analysis, the Index is likely to be undergoing the potential final downleg of a minor degree corrective wave 4 with potential end targets set at 2353 and 2348. These end targets also confluences with the lower boundary of the aforementioned descending channel and the minor swing low area of 24 February 2017.
• The hourly Stochastic oscillator has almost reached its extreme overbought level which suggests a potential revival of downside momentum.

Key levels (1 to 3 days)

Pivot (key resistance): 2373

Supports: 2353/48 & 2338 (medium-term pivot)

Next resistance: 2400

Conclusion

The Index is still undergoing a corrective decline which is likely to be coming to an end soon holding above the 2338 medium-term pivotal support (click here for a recap on our latest weekly technical outlook).

On the shorter-term (1 to 3 days), as long as the 2373 short-term pivotal resistance is not surpassed, the Index may see further weakness to target the next supports at 2353 follow by 2348.

However, a clearance above 2373 is likely to invalidate the bearish tone to see the start of a recovery to retest the current all-time high area of 2400 in the first step.

Charts are from City Index Advantage TraderPro

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