sp 500 further potential upside above 213020 1820952016

Daily Outlook, Tues 12 July 2016 (Click to enlarge charts) What happened earlier/yesterday The U.S. SP 500 Index (proxy for the S&P 500 futures) has […]

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By :  ,  Financial Analyst

Daily Outlook, Tues 12 July 2016

S&P500 (daily)_12 Jul 2016

S&P500 (1 hour)_12 Jul 2016(Click to enlarge charts)

What happened earlier/yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has performed as expected and hit a new all-time high yesterday printed a high of 2143 (above the May 2015 high of 2134/38) and closed at 2137.

As per highlighted in our earlier technical outlook/strategies both weekly and short-term, the S&P 500 will be the market leader among the major benchmark indices as it has likely completed its corrective cycle wave IV (Elliot Wave Principal & fractal analysis) earlier than the rest (on 11 February 2016 low of 1807.

Please click on this link to recap our latest weekly (medium-term) technical outlook/strategies for major stock indices published yesterday.

Today’s U.S. key economic data releases/events

  • Fed’s Tarullo speech @1315GMT
  • Fed’s Bullard speech @1335GMT
  • Wholesale inventories for May @1400GMT (0.1% consensus)

Key elements

  • In the shorter-term now, the Index has started to evolve within a bullish ascending channel in place since the post Brexit, 27 June 2016 low of 1991.
  • The lower boundary (support) of the aforementioned short-term ascending channel rests at 2130 with its slightly above the upper limit of the former range resistance that has capped the Index since May 2015 high (former all-time high) now turns pull-back support at 2120.
  • The 2130/20 supports also confluences with a Fibonacci retracement.
  • The median line of the short-term ascending channel is now acting as an intermediate resistance at 2154. In addition, based on the Elliot Wave Principal and fractal analysis, the current rally from last Wednesday, 06 July 2016 low of 2074 is likely a bullish impulsive intermediate degree wave 3/. Within a wave 3/, it can be broken down into lower degree/smaller fractals wave structures and the rally seen from last Friday, 08 July 2016 low of 2089 @2.00 am SGT can be counted as a potential on-going minor degree wave 3 with a potential end target at 2147 (based on Fibonacci clustering techniques) which is slightly below the median line of the ascending channel.

Key levels (1 to 3 days)

Intermediate support: 2130

Pivot (key support): 2120

Resistances: 2154 & 2194

Next support: 2100 (weekly pivot).


Maintain bullish bias but a potential minor pull-back/consolidation cannot be ruled out at the 2154 intermediate resistance (median line of the short-term ascending channel) towards the intermediate support at 2130 with a maximum limit set at the 2120 daily short-term pivotal support. Thereafter, the Index is likely to resume its potential ascend to target the next resistance at 2194 in the first step.

However, a break below the 2120 short-term pivotal support is likely to negate the preferred bullish tone to see a further slide to test this week medium-term pivotal support set at 2100.


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