sp 500 undergoing short term consolidation before another potential upleg 1825962016

Daily Outlook, Wednesday 10 August 2016

(Click to enlarge charts)

What happened earlier/yesterday

Since our last short-term technical outlook/strategy report dated on Friday, 05 August 2016, the U.S. SP 500 Index (proxy for the S&P 500 futures) has staged the expected push up and hit the short-term target/resistance at 2183 (printed a high of 2187 on Monday, 08 August European session). Thereafter, it has traded within a 10 points range after another attempt to assault the 2187 level yesterday, 09 August.

Please click on this link to recap our latest weekly technical outlook/strategy published earlier on Monday, 08 August 2016.

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

• JOLTS Job Openings for Jun @1400 GMT (5.52M consensus)

Key elements

• Since hitting the high of 2187 on Monday, 08 August (European session), the current short-term range configuration has taken the form a potential bullish continuation pattern called “Pennant” (depicted in dotted blue) with the base of it acting as a support at 2177 (see 1 hour chart).
• The aforementioned 2177 support also confluences closely with the lower boundary of a short-term bullish ascending channel (depicted in green) in place since 03 August 2016 low and the 23.6% Fibonacci retracement of the on-going rally from 03 August 2016 low to the high of 2187 (see 1 hour chart).
• The significant short-term resistances stand at 2194 and 2200 which are defined by Fibonacci projection clusters and the upper boundary of the short-term ascending channel (see 1 hour chart).
• Based on the Elliot Wave Principal and fractal analysis, the current price action of Index is appearing to be coming to a potential end for a minor degree wave 4/ (Pennant configuration) with its potential low set at 2177. Thereafter, it is likely to shape the potential impulsive bullish wave 5 of a minor degree with potential targets set at 2194 and 2200.
• The daily (medium-term) RSI oscillator remains positive above its support and 50% level. In addition, it still has room to manoeuvre to the upside before reaching an extreme overbought level. These observations suggest that upside momentum of price action remains intact that reinforces the aforementioned potential bullish wave structure and fractal analysis.

Key levels (1 to 3 days)

Pivot (key support): 2177

Resistances: 2194 & 2200

Next support: 2165

Conclusion

Maintain bullish bias with a tightened short-term pivotal support. As long as the 2177 daily short-term pivotal support holds, the Index is likely to see another potential push up to target the next resistance at 2194 and even 2200.

On the other hand, a break below the 2177 short-term pivotal support may invalidated the preferred direct rise scenario for a deeper slide to test the next support at 2165

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