sp 500 242718 key support to maintain short term bullish trend 2693372017

Short-term Technical Outlook (Thurs,08 Jun 2017)

(Click to enlarge charts)

What happened earlier/yesterday

Since the start of the week on 05 June 2017, the S&P 500 Index (proxy for the S&P 500 futures) had been trading in a “wobble-liked” decline since its latest all-time high of 2440 printed on last Friday, 02 June. Yesterday, it dipped further to form a new minor marginal low of 2424 before it recovered slightly at the close of the U.S. session at 2429.

Later today, we will have two major risk events; the results on the U.K. general elections where PM May’s Conservatives party faces the risk losing its current majority seating in the U.K. parliament and ex FBI director Comey’s testimony (open to public and closed door) in the U.S. Senate that will start at 1400 GMT. The primary focus on Comey’s testimony will be on the on the communications between him and President Trump that before his sudden dismissal. Since Comey’s dismissal, there had been rampant speculation that he was sacked due to his reluctance to adjust his scope of investigation at the request of President Trump on former national security advisor, Michael Flynn’s alleged links with Russian officials that interfered in the 2016 U.S. presidential election which skewed the outcome in favour of Trump.

Comey’s prepared testimony statement was released yesterday by the Senate Intel Committee that gave details from the nine separate meetings he had with President Trump that consisted of “uneasiness” and Trump’s demands for Comey’s loyalty to him. Interestingly, the Index had shrugged it off and closed higher at end of the U.S. session from its intraday low of 2424 at 2433.

Key technical elements

• The on-going pull-back from its current all-time of 2440 had managed to find support at a minor intermediate support of 2427/24 zone which is defined by the pull-back support of the ascending range bullish breakout from its former upper boundary on 02 Jun 2017, the lower boundary of a short-term ascending channel in place since 18 May 2017 low and 38.2% Fibonacci retracement of the recent up move from 31 May 2017 minor swing low of 2403 to the current all-time high of 2440) (see 4 hour chart).
• From the shorter-term hourly chart, the Index has started to evolve within a bullish ascending channel from the 31 May 2017 minor swing low of 2403 with its lower boundary now acting as a support at 2427 and upper boundary/resistance at 2460 which is also defined by a Fibonacci projection cluster (see 1 hour chart).
• The daily RSI oscillator continues to remain bullish above its first support at the 61% level which indicates that the medium-term (1 to 3 weeks) upside momentum remains intact for the Index.
• The key short-term support now rests at the 2420/18 zone which is defined by the former minor range top from 26 May/29 May 2017 and the 23.6% Fibonacci of the on-going up move from 18 May 2017 low to last Friday, 02 June high.

Key levels (1 to 3 days)

Intermediate support: 2427

Pivot (key support): 2420/18

Resistances: 2446/48 & 2460

Next support: 2403 (medium-term pivot)

Conclusion

The short-term bullish trend remains intact for the Index as long as any potential decline is being held now by the 2427 intermediate support with a maximum limit set at the 2420/18 short-term pivotal support for another potential upleg to target the next resistance at 2446/48 and 2460.

However, failure to hold above 2420/18 is likely to negate the preferred short-term bullish bias for a deeper corrective decline to test the medium-term pivotal support at 2403. Only break below 2403 will invalidate our medium-term (1 to 3 weeks) bullish view

Charts are from City Index Advantage TraderPro

Disclaimer

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs. While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments. City Index recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets. It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com.au, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. GAIN Capital Australia Pty Ltd (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.