sp 500 short term technical outlook final potential push down to test 21102100 1834482016

Mon, 17 Oct 2016

(Click to enlarge charts)

What happened earlier

The U.S. SP 500 Index (proxy for the S&P 500 futures) has indeed shaped a short-term push up in last Friday’s U.S. session (14 October) after oversold conditions seen in short-term momentum indicators on last Thursday (13 October).

Interestingly, last Friday’s rally stopped right below the 2150 medium-term potential upside trigger which we have highlighted in our latest weekly technical outlook published on last Friday, 14 October (click here for a recap).

Key U.S. economic data releases/events for today

• Industrial Production for Sep @1315GMT (0.2% m/m consensus where -0.4% m/m for Aug)
• Fed Vice Chairman Fischer Speaks @1615GMT

Key elements

• The daily RSI oscillator is still capped by a descending trendline resistance and it still has room for further downside (depicted by the pink box) before reaching its support and oversold region. This observation suggests that there is still some potential “residual” downside momentum left to push the Index lower.
• The key medium-term pivotal support zone rests at 2110/100 which is defined by the pull-back support of the former multi-month range consolidation from 17 May 2015 high and a Fibonacci cluster (see daily chart).
• Key short-term resistance stands at 2135.

Key levels (1 to 3 days)

Pivot (key resistance): 2135

Support: 2110/2100 (medium-term pivot)

Next resistance: 2150 (medium-term upside trigger)

Conclusion

Short-term technical elements are bearish. Thus, as long as the 2135 short-term pivotal resistance is not surpassed, the Index may see a final potential push towards 2110 with a maximum limit set at 2100 before a recovery materialises.

However, a clearance above 2135 is likely to invalidate the preferred “last push down” scenario for a push up to retest the 2150 resistance in the first step.

Charts are from City Index Advantage TraderPro

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