sp 500 daily outlook fri 04 sep 1920 is the key support to watch 1202792015

(Click to enlarge charts)

What happened earlier

The U.S. SP 500 Index (proxy for the S&P 500) has continued to push higher and met our first target at 1966.

Please click on this link for a recap on our previous daily outlook.

Key elements

• Since the low of 24 August 2015, the Index has evolved into a short-term ascending channel (in green) with upper (resistance) and lower (support) boundaries at 2050 and 1920 respectively (see 1 hour chart).
• The upper boundary of aforementioned ascending channel also corresponds with the former December 2014/February 2015 and March/April 2015 range support now turns pull-back resistance at 2040/2050 (see daily chart).
• The hourly (short-term) Stochastic oscillator has flashed a bullish divergence signal at its oversold region which indicates that the current downside momentum in place since 03 September high @10pm has abated.

Key levels (1 to 3 days)

Pivot (key support): 1920

Resistance: 1993 & 2040/2050

Next support: 1854

Conclusion

We maintain our bullish view. As long as the 1920 daily pivotal support holds, the Index is likely to see another attempt to rally towards the short-term range top at 1993. Only a clear break above 1993 may trigger a further upside movement to target the upper boundary of the short-term ascending channel and pull-back resistance that confluence at the 2040/2050 zone.

On the other hand, a break below the 1920 pivotal support is likely to invalidate the bullish scenario for a slide to retest the critical support at 1854.

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