sp 500 daily outlook for tues 18 aug at 2094 pull back support 1062122015

(Click to enlarge charts)

What happened yesterday

The US SP 500 Index (proxy for the S&P 500) has managed to stage the expected bullish breakout from the former “stubborn” trendline resistance that has capped the Index since 21 July 2015 @3am.

Key elements

• Current price action of the US SP500 Index has staged a pull-back which is in line with other major global indices after a 6.5% plunge seen in the Shanghai Composite Index in the afternoon session due to an announcement from Chinese brokerages to restart margin finance and short-selling facilities.
• The current pull-back has managed to stage at the former trendline resistance now turns pull-back support (in dotted brown) at 2094.
• Since the 13 August 2015 low @12am, the Index has now evolved into a short-term ascending channel with its upper boundary (resistance) pointing towards the 2128/2138 zone which also confluences with the 5-month sideways range configuration in place since late February 2015 (see daily & 1 hour charts).
• The hourly Stochastic has dipped back into the oversold region which suggests a potential rebound in price action of the Index is imminent.

Key levels

Pivot (key support): 2094

Resistance: 2113 & 2128/2138

Next support: 2078

Conclusion

As long as the 2094 daily pivotal support holds, the Index is likely to shape another round of potential upside movement to target 2113 with a maximum limit set at the significant range top of 2128/2138.

On the flipside, a break below the 2094 pivotal support is likely to negate the bullish tone to see a slide to retest the 2078 support in place since 13 August 2015 low @9pm.

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