sp 500 daily outlook wed 08 june 2016 eyeing the all time high swing area of 2134 1814942016

(Click to enlarge charts)

What happened earlier/yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has broken (daily close) above the 2110 medium-term pivotal resistance set for this week, thus our preferred bearish setback scenario towards range support at 2058 has been invalidated (click here for a recap).

This recent push up in price action seen in the S&P 500 has been fuelled by rally in WTI crude oil and a sell-off in the U.S. dollar after last Friday, 03 June 2016 weaker than expected Nonfarm payrolls data for May where employers just added only 38,000 jobs versus an expectation of 164,000 which in turns drives up the U.S. dollar sensitive sectors; Industrials (XLI), Utilities (XLU) and Energy (XLE).

The on-going short-term bullish trend of the Index has continued to be supported after U.S. Fed chairwoman, Yellen’s less hawkish speech on Monday, 06 June 2016 on the timing of the next interest rates hikes (no hints of definite dates) given the latest weak Nonfarm payrolls data for May.

Key elements

• After the bullish breakout from the descending trendline resistance in place since 17 May 2015 all-time high at 2100, the next significant resistance now stands at the 2134/2144 zone.
• The 2134/44 resistance zone is defined by a confluence of elements (the all-time swing high area of 17 May 2015, a Fibonacci cluster and the upper boundary of the short-term ascending channel in place since 03 June 2016 minor swing low).
• The key short-term support to watch now will be at 2108 which is defined by the lower boundary of the short-term ascending channel and this morning Asian session low.

Key levels (1 to 3 days)

Pivot (key support): 2108

Resistances: 2128 & 2134

Next support: 2085

Conclusion

The short-term bullish trend remains intact and as long as the 2108 daily short-term pivotal support holds, the Index is likely to shape a further potential upside movement to target 2128 follow by the key resistance of 2134.

On the other hand, failure to hold above the 2108 short-term pivotal support is likely to negate the bullish tone to see a decline to retest last week range support at 2085

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