sp 500 short term pull back completed potential direct rise in progress 1821502016

Daily Outlook, Thurs 14 July 2016

(Click to enlarge charts)

What happened earlier/yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has staged a pull-back but it is only very minor in nature to print a low of 2146 in the yesterday’s early U.S. session (shed only 0.55%) before it traded sideways.

The pull-back in price action seen yesterday did not hit the upper limit of the predefined short-term support zone of 2140/30 but it can be considered as completed (more details as per highlighted below).

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:

• Producer Price Index ex Food & Energy for June @1230GMT (1.0% y/y consensus)
• Initial Jobless Claims for the week ended 08 Jul 08 @1230 GMT (2.128M consensus)
• Fed’s Lockhart speech @1515 GMT
• JPM Q2 2016 earnings  (1.43 EPS consensus)

Key elements

• Yesterday’s pull-back in price action has managed to held right at the lower boundary (support) of the short-term bullish ascending channel in place since 28 June 2016 low at 2148.
• Based on the Elliot Wave Principal and fractal analysis, the Index is likely to be in the midst of undergoing an intermediate term extended bullish impulsive wave 3/ from the 06 July 2016 low of 2074 with expected potential targets/resistances set at 2194 (1.00 projection) and 2222 (1.236 projection).
• The upper boundary of the above mentioned short-term ascending channel also confluences with 1.236 Fibonacci projection at 2222.
• The 4 hour Stochastic oscillator continues to inch upwards and still has room for further upside before reaching an extreme overbought level. These observations suggest that upside momentum of price action remains intact.

Key levels (1 to 3 days)

Intermediate support: 2158

Pivot (key support): 2148

Resistances: 2194 & 2222

Next support: 2110

Conclusion

Short-term pull-back is likely to have ended. As long as the 2148 daily short-term pivotal support holds, the Index is likely to see the continuation of its potential rally to target 2194 before 2222.

On the other hand, failure to hold above the 2148 short-term pivotal support may negate the preferred bullish tone to revive the deeper pull-back scenario to test the next support at 2110 (the pull-back support zone of the former range top bullish breakout).

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