sp 500 potential final push down below 217378 before recovery 1829222016

Daily Outlook, Fri 02 September 2016

(Click to enlarge chart)

What happened earlier/yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has declined as expected right below the 2178 predefined intermediate resistance.  It printed a low of 2156 which is closed our short-term downside target/resistance of 2155.

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:

• Nonfarm Payrolls for Aug @1230GMT (180K consensus)
• Unemployment Rate for Aug @1230GMT (4.8%)
• Factory Orders for Jul @1400 GMT (2.0% m/m consensus)

Key elements

• Downside momentum of price action remains intact. Firstly, the daily (medium-term) RSI oscillator remains below its pull-back resistances and still has further room to manoeuvre to the downside before reaching its support/oversold region. Secondly, the shorter-term (1 hour) Stochastic oscillator is now at its overbought region which suggests limited upside potential.
• Based on the Elliot Wave Principal and fractal analysis, the Index is likely to be undergoing the potential minor degree wave c down leg to complete the intermediate degree (higher time frame) corrective decline wave 4/ in place since 15 August 2016 high. The potential projected low/end target of the corrective wave 4/ stands at the 2155/47 zone.
• The aforementioned projected 2155/47 zone also confluences with the medium-term swing low area of 02 August 2016.

Key levels (1 to 3 days)

Intermediate resistance: 2173

Pivot (key resistance): 2178

Supports: 2155 & 2147

Next resistance: 2194 (medium-term pivot)

Conclusion

Maintain bearish bias for a potential last push down to end corrective decline.  As long as the tightened short-term pivotal resistance of 2178 is not surpassed, the Index is likely to shape another down leg towards 2155 and even 2147 before a potential recovery materialises.

However, a clearance above the 2178 short-term pivotal resistance may invalidate the preferred direct drop scenario for a further push up to test the medium-term pivotal resistance of 2194.

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