sp 500 daily outlook tues 14 june 2016 potential bearish tone remains intact below 20742085 resistan

(Click to enlarge charts)

What happened earlier/yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has staged the expected rebound in the first hour of yesterday’s U.S. session. It has hit the lower limit of the predefined intermediate resistance zone of 2098/103 (printed a high of 2098) as per highlighted in our latest weekly technical outlook/strategy.

Thereafter, it has tumbled as expected and broke below the 2085 downside trigger level. Please click on this link to recap the details as per highlighted in our latest weekly technical outlook/strategy published yesterday.

Key elements

• The bearish breakdown of the former minor range support of 2085 has now turned into a key short-term pivotal resistance which also confluences with upper boundary of a short-term bearish descending channel in place (depicted in pink) (see 4 & 1 hour charts).
• Based on the Elliot Wave Principal and fractal analysis, the Index is now likely undergoing an extended bearish impulsive down move of a minor degree in place since the “bull trap” high of 2121 on 09 June 2016. The potential extended 5^th wave target (end of the minor bearish cycle) is at 2058/54 which is defined by the 1.236 Fibonacci projection from the 09 June 2016 high and close to 61.8% Fibonacci retracement of the prior rally from 19 May 2016 low to 09 June 2016 high.
• The hourly (short-term) Stochastic oscillator has already reached the extreme oversold level which highlights the risk of an imminent minor rebound in price action.

Key levels (1 to 3 days)

Intermediate resistance: 2074

Pivot (key resistance): 2085

Support: 2064/61 & 2058/54

Next resistance: 2098

Conclusion

Short-term technical elements remain bearish. The Index is now eyeing the near-term support at 2064/61 (1.00 Fibonacci projection + lower boundary of the short-term descending channel) where it may see a minor rebound to retest 2074 (today’s Asian session low) given the extreme oversold condition seen in the hourly Stochastic oscillator. As long as the 2085 daily short-term pivotal resistance is not surpassed, the Index is likely to shape another potential downleg to target the next support at 2058/54.

On the other hand, a break above the 2085 short-term pivotal resistance is likely to negate the bearish tone to see a deeper “relief rally “to retest yesterday’s minor swing high of 2098.

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