sp 500 daily outlook wed 16 sep coming close to range top at 1994 1315042015

(Click to enlarge chart)

What happened yesterday

The U.S. SP 500 Index (proxy for the S&P 500) has managed to push higher from the lower limit (support) of its range configuration and almost high the expected target at 1994 (printed a high of 1983).

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

Key elements

• Since the 28 August 2015 high, the Index has started to trade within an “Ascending Triangle” range configuration with upper limit (resistance) at 1994 and lower limit (trendline support) now at 1946.
• Current price action is coming close to the upper limit (resistance) of the range configuration at 1994.
• The next significant resistance stands at 2040/50 which is the former range bottom (support) in May/July 2015.
• The hourly (short-term) Stochastic oscillator has just exited from its oversold region but the 4 hour (short-term) Stochastic oscillator is coming close to its extreme overbought level. This observations from two different time frames suggest limited upside potential for the Index.

Key levels (1 to 3 days)

Resistance: 1994 & 2040/2050

Next support: 1946/1938 & 1910

Conclusion

Technical elements suggest range trading between 1994 and 1946/1938 unless the Index has a breakout above its 1994 range top (resistance) to trigger a rally to target the next resistance at 2040/2050.

On the other hand, a break below the lower limit of the range at 1946/1938 is likely to see a slide to test the 1910 support (the swing lows of 02 September 2015 @3am & 05 September 2015 @2am).

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