sp 500 daily outlook fri 11 dec potential short term bearish movement remains intact below 2069 resi

(Click to enlarge charts)

What happened yesterday

The U.S. SP 500 Index (proxy for the S&P 500) has pushed higher but failed to break above the 2069 short-term pivotal resistance as expected before it retraced lower in the last hour of cash trading in the U.S. session.

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

Key elements

• The upside momentum seen in the short-term push up in price action from Thursday, 10 December 2015 low has started to subside as indicated by the bearish divergence signal flashed by the hourly (short-term) Stochastic oscillator neared its overbought region. *Bearish Divergence is an observation seen when price action traced out a series of “higher highs” but the momentum oscillator is not showing a similar movement (showing the opposite) in the same corresponding time period.
• The Index has remained within a short-term descending channel (in pink) in place since 02 December 2015 high @4pm with its lower boundary (support) at around 2030.
• The lower boundary (support) of the aforementioned descending channel at 2030 also confluences closely with the 1.00 Fibonacci projection of the down move from 02 December 2015 high @4pm to 04 December 2015 low @3am projected from 07 December 2015 high @5pm
• The key short-term resistance remains at 2069 which is the pull-back resistance of the former lower boundary ascending channel in place since 29 September 2015 low (see daily chart).

Key levels (1 to 3 days)

Pivot (key resistance): 2069

Support: 2030

Next resistance: 2088

Conclusion

As long as the 2069 daily (short-term) pivotal resistance is not surpassed, the Index is likely to shape another down leg to target the short-term descending channel support at 2030.

However, a clearance above the 2069 pivotal resistance may invalidate the short-term bearish scenario for a squeeze up towards the short-term descending channel resistance at 2088.

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