sp 500 daily outlook thurs 14 apr 2016 testing 2081 key medium term resistance with mixed elements 1

(Click to enlarge charts)

What happened yesterday/earlier

The U.S. SP 500 Index (proxy for the S&P 500 futures) has continued to push higher and stage an assault on the 2081 medium-term pivotal resistance. It printed a high of 2083 in the U.S. session before it dipped slightly in todays’ European session.

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

Key elements

• Current price action has continued to trade in a tight sideways fashion (8 points) from yesterday high of 2083 (close to the 2081 medium-term pivotal resistance).
• The daily (medium-term) RSI oscillator is still being capped by a trendline resistance from its recent swing highs (in pink) (see daily chart).
• However, price action is not showing any clear signs of upside exhaustion.
• Given that WTI oil is an asset class that drives the recent rally seen in the U.S. SP 500 Index from 12 April 2016 low, therefore we should pay close attention to price movement of the WTI. As per highlighted in yesterday’s short-term outlook, WTI has shown some signs of upside exhaustion by still trading above its key short-term support at 40.13. No major changes as of current price action.
•  The first near-term support to watch on the U.S. SP 500 Index stands at 2065 which is the former minor swing high area of 07 April 2016 where price action has tested in yesterday, 13 April 2016 European session and rallied off from it. Right now, it is also the minor trendline support that from 12 April 2016 low @6am (see 1 hour chart). The 2065 support level of the U.S. SP 500 Index should be in parallel with the WTI’s support of 40.13.
• The next support to watch on the Index rests at 2050 which is pull-back support of the former short-term descending channel bullish breakout (in dotted red) (see 1 hour chart).

Key levels

Supports: 2065 & 2050

Resistances: 2081/83 & 2100

Conclusion

Mixed elements at the moment, thus we are not taking any directional stance and prefer to stay neutral within a zone of 2081/83 and 2065. Only a break below 2065 is likely to trigger at least a short-term pull-back to target the next support at 2050.

On the flipside, a break above 2083 may see a further push up to test the next “big” resistance at 2100 (trendline resistance of the “Rounding Top” configuration that has linked the lower highs since 17 May 2015 high + swing highs area of 20 November and 02 December 2015).

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