sp 500 weekly outlook for 09 mar to 13 mar potential short term push up before downside movement res

(Click to enlarge charts)

What happened last week

The U.S. SP 500 Index (proxy for the S&P 500) has plummeted and met our expected weekly target of 2067. Please click on this link for more details on our previous weekly outlook.

Key elements

• Price action has retreated from the upper limit of the “Expanding Wedge” configuration at 2120 (see daily chart).
• The intermediate RSI oscillator has broken below its former trendline support and still has downside potential before reaching the oversold region (see daily chart).
• The 200-day Moving Average is coming to act as a support at around 2022 (see daily chart).
• The lower limit of the “Expanding Wedge” stands at 1980/1975 (see daily chart).
• From the upper limit of the “Expanding Wedge”, price action has traced out a five wave down movement. Based on the Elliot Wave principle, the Index is likely to shape a counter-trend rally above the 2067 support (see 4 hour chart).
• This potential counter-trend rally is being reinforced by the short-term Stochastic oscillator at its “extreme” oversold level (see 4 hour chart).
• The intermediate resistance at 2092/2104 also corresponds with the 61.8%/76.4% Fibonacci retracement from 26 February 2015 high to 06 February 2015 low (see 4 hour chart).
• The 2033/2022 support confluences with a Fibonacci cluster (see 4 hour chart).

Key levels (1 to 3 weeks)

Intermediate resistance: 2092/2104

Pivot (key resistance): 2120

Support: 2067 & 2033/2022

Next resistance: 2140/2170

Conclusion

Intermediate term technical elements remain bearish. However, do expect a potential short-term push up above 2067 towards the 2092/2104 intermediate term resistance before another round of potential downside movement occurs to target the next support at 2033/2022.

However, a clearance above the 2120 weekly pivotal resistance is likely to negate the intermediate term setback scenario for a continuation of the bullish trend to target the next resistance at 2140/2170.

Disclaimer

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