sp 500 daily outlook thurs 14 jan 2016 back to 189080 key long term support 1793262016

(Click to enlarge charts)

What happened earlier

The U.S. SP 500 Index (proxy for the S&P 500) has bounced higher but do hit our expected short-term upside target at 1970 (printed a high of 1954 yesterday).

Key elements

• Yesterday, the Index has plummeted but managed to stall at the pull-back support of the former trendline resistance (in dotted green) which also confluences with the key long-term support of 1890/80 (see weekly chart).
• The intermediate short-term resistance to watch will be at 1936 which is the pull-back resistance that linked the former higher lows of 12 January to 13 January 2015 (see 1 hour chart).
• The hourly (short-term) RSI oscillator has managed to bounce from its trendline support in the oversold region. This observation suggests the revival of a rebound after yesterday’s steep down movement.

Key levels (1 to 3 days)

Pivot (key support): 1890/80

Resistance:  1936 & 1970

Next support: 1832/20

Conclusion

As long as the 1890/80 key long-term pivotal support holds, the Index may see a rebound to retest the 1936 resistance. Only a break above 1936 is likely to add impetus for a further upside movement to target the next resistance at 1970 (close to the 50% Fibonacci retracement of the current decline from 30 January 2015 to yesterday’s low).

However, a break below the 1890/80 key support is likely to jeopardise the long-tern bullish trend in place since March 2009 for a further drop to retest the range support area of 24 August  to 29 September 2015 at 1835/20 in the first instance.

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