sp 500 maintain bullish bias and tolerate excess to 2172 1826142016

Daily Outlook, Thursday 11 August 2016

(Click to enlarge charts)

What happened earlier/yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has breached below the predefined 2177 short-term pivotal support set in yesterday’s daily short-term technical outlook (printed a low of 2172) and invalidated the bullish continuation “Pennant” pattern.

However, it has managed to stage a rebound in today’s (11 August), European session and traded back up above 2177. Therefore, we can consider yesterday’s price movement as a whipsaw.

Please click on this link to recap our previous daily short-term technical outlook/strategy

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

• Initial Jobless Claims for the week ending Aug 05 @1230GMT (265K consensus)

Key elements

• The daily (medium-term) RSI oscillator remains positive above its support and 50% level which suggests that upside momentum of price action remains intact.
• The decline to yesterday low of 2172 has stalled a Fibonacci cluster (38.2% retracement of the rally from 03 August 2016 low to 2187 high seen on 09 August 2016 + 1.382 projection from 09 August 2016 high).
• There is a short-term descending trendline (depicted in dotted pink) in place since 08 August 2016 high now acting as a resistance at 2184 (see 1 hour chart).
• The significant resistances stand at 2194 and 2200 which are defined by Fibonacci projection clusters

Key levels (1 to 3 days)

Intermediate support: 2177

Pivot (key support): 2172

Resistances: 2184, 2194 & 2200

Next support: 2159/2155 (medium-term pivot)

Conclusion

Tolerate the excess to 2172 and maintain bullish bias. A clear break above 2184 is likely to add impetus for a potential rally to target the next resistance at 2194 and even 2200 next.

However, a break below the 2172 (excess) short-term pivotal support is likely to invalidate the preferred short-term direct rise scenario for a deeper pull-back towards the next support at 2159/55

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