sp 500 daily outlook thurs 02 june 2016 looking vulnerable now for short term bearish breakdown afte

(Click to enlarge charts)

What happened earlier/yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has staged an initial decline towards the first downside target (support) at 2085 and shaped the expected “snap-back” to retest the significant 2100 resistance in the late U.S. session.

Please click on this link to recap our previous daily short-term outlook/strategy.

Today’s key economic data releases and meeting as follow

1)      U.S. ADP Employment Change for May @1215GMT

2)      ECB monetary policy statement and press conference @1230GMT

3)      OPEC meeting

 Key elements

• After a retest on the 2100 descending trendline resistance in place since 17 May 2016 high, price action has stalled again for the third time since 30 May 2016 high of 2105 as represented by a shorter-term descending trendline (see daily & hourly charts).
• In conjunction, the daily (medium-term) RSI oscillator has also reacted from its resistances and shows further potential downside. These observations suggest a built up in downside momentum of price action.
• The next significant short-term support after 2085 remains at the 2065/58 zone which is defined by the 50%/61.8%  Fibonacci retracement of the recent swift rally from 19 May 2016 low to 30 May 2016 high of 2105, the pull-back support of the former short-term descending channel bullish breakout and minor swing high areas of 19/23 May 2016.

Key levels (1 to 3 days)

Intermediate resistance: 2100

Pivot (key resistance): 2110

Supports: 2085 & 2065/58

Next resistance: 2138

Conclusion

After a third retest on the 2100 level within this week, the Index is now looking vulnerable to stage a short-term potential bearish breakdown below 2085 to target 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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