sp 500 risk of minor pull back below 215456 before new rise 1821222016

Daily Outlook, Wed 13 July 2016

(Click to enlarge charts)

What happened earlier/yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has moved within our expectation as it rallied towards the 2154 predefined short-term risk level (printed a high of 2155) before it traded sideways.

Please click on this link for a recap on our prior daily short-term technical outlook/strategy.

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

• Fed’s Beige Book @1800 GMT

Key elements

• From the 06 July 2016 low of 2074 has rallied by 3.9% to yesterday’s high of 2155 with shallow pull-back with the maximum seen so far at 0.95%. Yesterday’s push up in price action has almost reached the median line of the short-term ascending channel in place since 28 June 2016 low at 2154 which also confluences closely with the 1.618 Fibonacci projection level for the minor up move wave 3 target (Elliot Wave principal & fractal analysis).
• The 4 hour Stochastic oscillator has flashed a bearish divergence signal at the overbought region coupled with the 1 hour Stochastic oscillator that has inched back to its overbought region as well. These observations from momentum indicators reinforce the risk of a minor pull-back in price action.
• The short-term ascending channel support rests at 2140/30 which also confluences with the 23.6% Fibonacci retracement of the recent rally from 06 July 2016 low to yesterday’s high of 2155.
• The key short-term support remains at 2120 which is defined by the upper limit of the pull-back support of the former range top/resistance from the May 2015 high.

Key levels (1 to 3 days)

Intermediate support: 2140/30

Pivot (key support): 2120

Resistances: 2154/56 & 2194

Next support: 2100 (weekly pivot).

Conclusion

Below 2154/56, the Index may see a minor pull-back first to test the 2140/30 intermediate support with a maximum limit set at the 2120 daily short-term pivotal support before another potential rally materialises to target the next resistance at 2194.

On the other hand, failure to hold above the 2120 short-term pivotal support may put the bulls on hold to see a deeper slide towards this week medium-term pivotal support at 2100.

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this email, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs. All queries regarding the contents of this material are to be directed to City Index, a trading name of GAIN Capital Singapore Pte Ltd.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.