sp 500 potential choppy upward movement to retest all time high at 2194 1833182016

Daily Outlook, Thurs 06 Oct 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 trade in a choppy fashion since the start of week holding above the 2135 medium-term pivotal support as market participants digest a slew of economic data releases and Fed talk ahead of this Friday, 07 October key  nonfarm payrolls data release for September.

There are more uptick in the most recent economic data releases. The ISM Manufacturing PMI for September has managed to beat expectations (51.5 versus 50.30) together with the services sector where the ISM Non-Manufacturing PMI for September came in at 57.1 versus a consensus of 53.0.

On the negative side, the ADP employment data (a prelude to the nonfarm payrolls) for September came in below expectation as it saw an increase of 154K versus a consensus of 166K.

Key elements

• Despite its current choppy movement, the Index is still holding above an ascending trendline support in place since the 12 September 2016 medium-term swing low of 2108 now acting as a support at 2150/48.
• The minor range top remains at 2174 which is defined by the minor swing high areas of 29 September/01 October 2016.
• The next resistance stands at 2194/2205 which is defined by the upper boundary of a ascending range configuration in place since the 12 September 2016 medium-term swing low, the current all-time of 2194 printed on 15 August 2016 and a Fibonacci projection cluster.
• The “growth oriented/higher beta” benchmark Nasdaq 100 has continued to outperform and it is just only 0.4% away from its current all-time high level of 4895 printed on 22 September 2016. These observations suggest positive sentiment remains intact in the U.S. stock market and the laggard, S&P 500 is likely to pick up speed soon (refer to the last chart)

Key levels (1 to 3 days)

Pivot (key support): 2150/48

Resistances: 2174, 2194 & 2205

Next support: 2135 (medium-term pivot)

Conclusion

Maintain bullish bias in a choppy upward environment.  As long as the 2150/48 short-term pivotal support holds and a break above 2174, the Index is likely to see a potential push up to retest the current all-time high of 2194 and even 2205 next.

However, a break below 2150/48 may negate the preferred bullish tone for a slide to test the 2135 medium-term pivotal support.

 Charts are from City Index Advantage TraderPro & eSignal

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