sp 500 risk of further weakness below 2352 2691172017

Short-term Technical Outlook (Thurs, 20 Apr 2017)

(Click to enlarge charts)

What happened earlier/yesterday

The U.S. S&P 500 Index (proxy for the S&P 500 futures) had a failure bullish breakout yesterday at the opening of the U.S. session as it reintegrated back below the minor descending trendline resistance from 05 April 2017 high.

Yesterday’s price  movement of the Index has reduced the probability of a short-term rebound towards the 2364 medium-term pivotal resistance where we still maintain our medium-term bearish bias (click here for a recap of our latest weekly technical outlook).

Key technical elements

• The key short-term resistance stands at 2352 which is defined by the minor swing high areas of 18 April/19 April 2017 and the 50% Fibonacci retracement of the recent decline from 05 April 2017 high to Monday, 17 April 2017 Asian session low of 2326.
• The daily RSI oscillator remains bearish below its pull-back resistance which suggests that medium-term downside momentum of price remains intact.
• The hourly Stochastic oscillator has started to inch upwards towards an extreme overbought level which suggests that a further minor push up is still possible towards the 2344/2352 region.
• The next short-term support after 2326 (17 April) minor swing low rests at 2312 which is defined by the 0.764 Fibonacci projection of the down move from 05 April 2017 high to 17 April 2017 low projected to yesterday high of 2352.

Key levels (1 to 3 days)

Intermediate resistance: 2344

Pivot (key resistance): 2352

Supports: 2326 & 2312

Next resistance: 2364 (medium-term pivot)

Conclusion

The Index may see a residual push up towards 2344/2352 key short-term resistance zone before another potential downleg materialises to retest 17 April 2017 minor swing low of 2326 before targeting the next support of 2312.

On the other hand, a clearance above the 2352 short-term pivotal resistance is likely to invalidate the preferred bearish bias to see a further squeeze up to test the 2364 medium-term pivotal resistance.

Charts are from City Index Advantage TraderPro

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