sp 500 daily outlook wed 02 sep maintain potential recovery scenario 1185452015

(Click to enlarge chart) What happened yesterday The U.S. SP 500 Index (proxy for the S&P 500) has challenged and traded below the 1923 daily […]


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By :  ,  Financial Analyst

S&P500 (1 hour)_02 Sep 2015(Click to enlarge chart)

What happened yesterday

The U.S. SP 500 Index (proxy for the S&P 500) has challenged and traded below the 1923 daily pivotal support before staging a recovery in today’s Asian trading session.

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

Key elements

  • The Index has managed to stage a rebound off the pull-back support and ascending trending joining the lows since 24 August 2015.
  • Therefore, yesterday’s challenge on the 1923 support can be considered as a “whipsaw” (false break).
  • The hourly (short-term) Stochastic oscillator has flashed a bullish divergence signal at its oversold region which indicates that the current decline from last Friday, 28 August 2015 high is losing downside momentum and a positive turnaround in price action is imminent.

Key levels (1 to 3 days)

Pivot (key support): 1923/1901 (to tolerate the whipsaw)

Resistance: 1966 & 1993

Next support: 1854

Conclusion

Based on the aforementioned technical elements, we have decided to maintain our initial bullish bias and tolerate the excess caused by the “whipsaw” to 1901.

As long as the 1923/1901 daily pivotal support holds, the Index is likely to see a recovery towards 1966 before 1993.

However, a break below 1901 will invalidate the bullish scenario for a further slide towards the next support at 1854.

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this email, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs. All queries regarding the contents of this material are to be directed to City Index, a trading name of GAIN Capital Singapore Pte Ltd.

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