sp 500 daily outlook fri 10 june 2016 potential upside trigger at 2118 1815292016

(Click to enlarge charts)

What happened earlier/yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has moved within our expectation as it dipped and hit the 2108 intermediate support (intraday low of 2108.1) before a rebound occurred in the late U.S. session.

On the fundamental front, latest continuing and initial jobless claims continue to show improvement as these figures manage to beat expectations where continuing jobless claims for the week ending May 27 came in at 20.95M versus expectations of 21.171M. Initial jobless claims for the week ending June 3 at 264K versus expectations of 270K. These jobless claims numbers are an encouraging sign for the U.S. labour market after last Friday’s horrendous Nonfarm payrolls figure of 38K for May.

Please click on this for a recap on our previous daily short-term outlook/strategy.

Today key U.S. economic data releases as follow:

• Reuters/Michigan Consumer Sentiment Index for Jun (preliminary) @1400GMT (94.0 est.)

Key elements

• The Index remains above the key support of 2108/2100 which is defined by a confluence of elements; the pull-back support of the former descending trendline resistance from 17 May 2015, the lower boundary of a short-term ascending channel in place since 19 May 2016 low of 2025 and a Fibonacci retracement cluster.
• The 4 hour RSI oscillator remains above its support and the 50% neutrality level. These observations suggest upside momentum of price action remains intact.
• On the shorter-term, the Index is now being capped by a descending trendline from 09 June 2016 high now acting as a resistance at 2118.
• The significant resistance zone remains at the 2134/2144 zone which is defined by the all-time swing high area of 17 May 2015 and a Fibonacci cluster).

Key levels (1 to 3 days)

Intermediate support: 2108

Pivot (key support): 2100

Resistances: 2118 (trigger), 2128 & 2134

Next support: 2085

Conclusion

As long as the 2100 short-term pivotal support holds and a break above the 2118 minor resistance is likely to trigger a further potential upside movement to target 2128 with a maximum limit set at the 2134 significant resistance.

On the other hand, failure to hold above the 2108 short-term pivotal support is likely to invalidated the preferred bullish push up for a steeper decline to retest last week range support at 2085

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