sp 500 daily outlook wed 23 sep potential final push down below 1953 resistance 1383352015

(Click to enlarge charts)

What happened yesterday

The U.S. SP 500 Index (proxy for the S&P 500) has broken below the 1947 weekly pivotal support and our initial push up scenario to at least test the 1996 upside trigger level is being put on hold.

The on-going decline of 4.8% from the “fateful” day on 18 September 2015 (Singapore time) where U.S. central bank, Fed has decided to stand pat on its overnight Fed Funds policy interest rate at 0.25% has appeared to be “horrendous”. However from a technical analysis perspective, it is still evolving within a range of 86 points since 28 August 2015 high of 1996.

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

Key elements

• The Index is now evolving within a sideways range with upper (resistance) limit at 1996 and lower (support) limit at 1910.
• The Index has broken below a former trendline support linking the lows of 02 and 05 September 2015 now turns pull-back resistance (in dotted red) at 1953
• The pull-back resistance at 1953 also confluences with the trendline resistance joining the highs since 18 September 2015 @2am and 50% Fibonacci retracement of the recent down move from 21 September 2015 high @10pm to the current low of 23 September 2015.
• The short-term Stochastic oscillator has reached its extreme overbought level which suggests limited upside potential at this juncture.

Key levels (1 to 3 days)

Pivot (key resistance): 1953

Support: 1922 & 1910

Next resistance: 1979

Conclusion

As long as the 1953 daily pivotal resistance holds, the Index may see a potential final down leg to target 1922 before the sideways range support at 1910.

On the other hand, a break above the 1953 pivotal resistance is likely to damage the bullish tone to see a further push up towards the next resistance at 1979.

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.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.