sp 500 short term technical outlook further potential push up above 2145 support 1835822016

Tues, 25 Oct 2016

(Click to enlarge charts)

What happened earlier/yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has managed to inch out a daily close above the 2150 medium-term upside trigger level which is positive from a technical analysis perspective. On the economic data front, preliminary U.S. Markit Manufacturing PMI for October came in better than expected (53.2 versus 51.5) and also surpassed the previous year to date high of 52.90 recorded for July.

Please click on this link for a recap on our latest weekly technical outlook for major stock indices.

Key U.S. economic data releases/events for today

• S&P/Case-Shiller Home Price for Aug @1300GMT (5% y/y consensus)
• Consumer Confidence for Oct @1400GMT (101.0 consensus)
• Apple (AAPL) Q4 earnings announcement (after close of U.S. session @2100GMT) (1.66 EPS consensus)

Key elements

• Yesterday’s bullish breakout from 2150 has also been accompanied by a bullish break on the descending trendline of the daily (medium-term) RSI oscillator. This observation suggests that upside momentum of price action has resurfaced.
• Key short-term support now rests at 2145 which is defined by the minor swing high area of 24 October 2016 and a Fibonacci cluster (see 1 hour chart).
• Short-term resistance stands at the 2174/80 zone which is defined by the descending trendline resistance (in dotted pink) from 08 September 2016 high and the 1.618 Fibonacci projection of the up move from 13 October 2016 low.
• The hourly (short-term) Stochastic oscillator has now inch down wards from its overbought region and still has room for further potential downside before reaching its extreme oversold level. This observation suggests that the Index may see a risk of a minor pull-back.

Key levels (1 to 3 days)

Intermediate support: 2150

Pivot (key support): 2145

Resistances: 2174 & 2180

Next support: 2133

Conclusion

Technical elements remain positive. The Index may see a pull-back to retest 2150 with a maximum limit set at the 2145 daily short-term pivotal support before another potential upleg materialises to target the next resistance at 2174.

However, failure to hold above 2145 is likely to confirm a failure bullish breakout for a choppy decline to retest the ascending trendline support in place since 13 October 2016 low now at 2133.

Charts are from City Index Advantage TraderPro

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