sp 500 daily outlook wed 11 nov another round of potential decline looms below 20852093 resistance 1

(Click to enlarge chart)

What happened earlier

The U.S. SP 500 Index (proxy for the S&P 500) has broken below its short-term support at 2083 which was last Friday, 06 November 2015 low and the lower boundary of the “Expanding Triangle” configuration.

This “latest piece” of price action has reduced greatly the odds of the “desired” final push up scenario to target the key medium-term resistance at 2138 (printed a high of 2116 on 04 November 2015, a difference of 1.03% away from 2138).

Key elements

• Through the bearish breakdown of the 2083 short-term support and based on the Elliot Wave Principal, the Index is likely to have completed the bullish wave 3/ on the 2116 high seen on 04 November 2015. Current price action, it is in the midst of unfolding the wave a downleg of the corrective (bearish) wave 4/.
• The key short-term resistance to watch will be at 2093 which confluences with the pull-back resistance of the former “Expanding Triangle”, the trendline resistance joining the highs since 04 November 2015 @10pm and the 50% Fibonacci retracement of the recent decline from 04 November 2015 high to 10 November 2015 low @1am.
• The hourly (short-term) Stochastic oscillator has turned down from its overbought region and still has room for further downside before reaching its extreme oversold level. This observation suggests a revival of downside momentum.

Key levels (1 to 3 days)

Intermediate resistance: 2085

Pivot (key resistance): 2093

Support: 2058

Next resistance: 2116

Conclusion

As long as the 2093 daily (short-term) pivotal resistance is not surpassed, the Index is likely to shape another round of potential decline to target the 2058 support (first expected downside target as per highlighted in our latest weekly outlook/strategy).

On the other hand, a clearance above the 2093 may negate the bearish tone to see a push up to retest the recent swing high at 2116.

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