sp 500 daily outlook fri 02 june 2016 risk of a bull trap below 2110 but needs to break below 2099 1
(Click to enlarge charts) What happened earlier/yesterday The U.S. SP 500 Index (proxy for the S&P 500 futures) has a daily close above the 2100 […]
(Click to enlarge charts) What happened earlier/yesterday The U.S. SP 500 Index (proxy for the S&P 500 futures) has a daily close above the 2100 […]
The U.S. SP 500 Index (proxy for the S&P 500 futures) has a daily close above the 2100 descending trendline resistance at 2105 but it remained below the 2110 pivotal resistance which is the upper limit of the medium-term neutrality range set for this week.
Please click on this link to recap our previous daily short-term outlook/strategy.
The 2100 level is indeed a significant level both in terms of psychological and technical analysis perspective as this level has been reported across major media outlets (social and print/TV). A daily close above 2100 is considered bullish accompanied by a healthy market breath. But will it be a bull trap? More about this below as we highlight the key elements to look out. Now let’s us recap some key economic numbers/event.
The private ADP employment data that released before Nonfarm payrolls saw employment grew by a solid number of 173K (consensus @ 175K) in May which is above April revised reading of 166K.
This uptick in ADP employment data is likely to be a strong number for the official government Nonfarm Payrolls out later at 1230GMT where consensus is set at 164K above the previous April reading of 160K.
OPEC meeting has ended without an agreement on oil production ceiling but the cartel’s “leader”, Saudi Arabia has promised not to create any shock to the market by flooding it with extra oil supplies in the press conference.
Today other key U.S. economic data release will be as follow
Pivot (key resistance): 2110
Supports: 2099 (downside trigger), 2085 & 2065/58
Next resistance: 2138
Therefore, we are not going to jump into the “bullish bandwagon” yet and we adopt a more cautious stance at the moment given the above mentioned technical elements. Price action now needs to break below 2099 to revive the short-term potential bearish pressure to retest the 2085 support and a break below it is likely to add impetus for a deeper slide towards the next support at 2065/58.
Only a clearance above the 2110 pivotal resistance is likely to invalidate the expected bearish scenario to see a further upside movement to retest the current all-time high/52-week high at 2138.
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