sp 500 further potential upside above 2158 support 1822472016

Daily Outlook, Thurs 21 July 2016

(Click to enlarge charts)

What happened earlier/yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has continued to push up as expected a printed a new intraday all-time high at 2175 in yesterday’s U.S. session before it traded sideways.

Yesterday’s rally in price action has been reinforced better than expectation Q2 earnings announcements from key companies such as Morgan Stanley (0.75 EPS versus 0.59 consensus), Qualcomm (1.16 EPS versus 0.97 consensus).

The market now waits for the key event of the week, ECB’s monetary policy announcement which is out later at 1145GMT

Please click on this link for a recap on our previous daily short-term technical outlook/strategy.

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

• Initial Jobless Claims for week ending 15 July @1230GMT (265K)
• Continuing Jobless Claims for week ending 08 July @1230GMT (2.145M consensus)
• Existing Home Sales for June (m/m) @1400 GMT (5.48M consensus)
• Conference Board Leading Indicator for Jun (m/m) @1400GMT (0.2% consensus)
• General Motors Q2 earnings (1.51 EPS consensus)
• Starbucks Q2 earnings (0.49 EPS consensus) – after the close

Key elements

• The new short-term key support now rests at 2158 which is defined by the minor swing low areas of 16 July/19 July 2016 and close to the 23.6% Fibonacci retracement of the recent rally from 06 July 2016 low to yesterday’s high of 2175.
• The hourly Stochastic oscillator has dipped back to the oversold region which highlights the potential end of yesterday’s minor sideways consolidation and the Index may now resume its ascend at this juncture.
• The key short-term resistances remains at 2194 follow by 2222 which are defined by Fibonacci projection clusters.

Key levels (1 to 3 days)

Pivot (key support): 2158

Resistances: 2194 & 2222

Next support: 2120 (medium-term pivot)

Conclusion

Maintain bullish bias with a tightened pivotal support. As long as the 2158 daily short-term pivotal support holds, the Index is likely to see another potential upleg to target the next resistances at 2194 and 2222.

On the other hand, failure to hold above the 2158 short-term pivotal support may negate the preferred bullish scenario to see a deeper pull-back to test the current medium-term pivotal support at 2120.

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