sp 500 bear trap above 2090 1836712016
S&P 500 Technical Outlook (Click to enlarge charts) What happened earlier With reference to our weekly technical outlook published at the start of this week […]
S&P 500 Technical Outlook (Click to enlarge charts) What happened earlier With reference to our weekly technical outlook published at the start of this week […]
(Click to enlarge charts)
With reference to our weekly technical outlook published at the start of this week (click here to recap), we had highlighted that the significant pull-back support to watch for the U.S. SP 500 Index (proxy for the S&P 500 futures) will be at the 2110/2100 zone if the medium-term pivotal support at 2124 did not hold. A clear break below (daily close) below 2110/2100 is likely to trigger a deep decline (approximately 5%) to test the key long-term pivotal support at 1990 (see weekly chart).
The Index had broken below the 2194 medium-term pivotal support on Tuesday, 01 November 2016 and continued its descend towards the 2110/2100 significant pull-back support zone which was the former range top from 17 May 2015 that held prior advances before a bullish breakout that occurred on 08 July 2016 that took it to a new all-time high of 2194 printed on 15 August 2016.
The main reason for this decline (down by 4.7% since its all-time high level of 2194 till yesterday, 03 November closing level of 2089) is caused by U.S. presidential candidate Hillary Clinton’s initial “comfortable lead” over Donald Trump in polls had narrowed significantly since the sudden shock announcement from FBI on last Friday, 28 October to reopen Clinton’s private email server case. Clearly, the stock market has viewed a Donald Trump victory as a “disaster”.
Despite yesterday, 03 November closing level of 2089 on the S&P 500 which is 0.5% deviation below from the lower limit of the significant 2110/100 pull-back support, we are not convince to validate a further steep decline at this juncture from a technical analysis perspective. Arguments are as follow:
Supports: 2090, 2040 & 1990
Resistances: 2115 & 2155
Conclusion
Therefore, we are now adopting a neutral stance in short-term between 2090 and 2115. Only a break above 2115 is likely to revive a short-term bullish tone for a push up towards the next resistance at 2155.
Charts are from City Index Advantage TraderPro, StockCharts.com & eSignal
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