sp 500 weekly outlook 07 sep to 11 sep mixed elements turn neutral between 1968 1910 1230952015

(Click to enlarge charts)

What happened last week

The U.S. SP 500 Index (proxy for the S&P 500) has broken below the 1947 weekly pivotal support and jeopardised our preferred bullish scenario for a direct rise. On the “bright side”, it still managed to trade above the key “Black Monday”, 24 August 2015 low of 1835.

Please click on this link for a recap on our previous weekly outlook.

*Note: The U.S. stock market is closed today, 07 September 2015 for a public holiday and will resume trading tomorrow. 

Key elements

• The S&P 500 Index has remained above the long-term key support at 1890 which is defined by the horizontal support on March 2014/October 2014 and the 23.6% Fibonacci retracement of the long-term upside movement from 02 October 2011 low to the 19 May 2015 current all-time high (see weekly chart).
• In addition, the Index has formed a bullish weekly “Hammer” candlestick at the 1890 long-term key support. The “Hammer” low stands at 1835 (see weekly chart).
• The key medium-term resistance stands at 2040/2050 which is the former range support linking the lows of March/April 2015 (see daily chart).
• In parallel, the daily (intermediate term) RSI remains below its trendline resistance which suggests the lack of upside momentum (see daily chart).
• In the short-term, the Index has appeared to evolve into a “Symmetrical Triangle” chart formation (in purple) which represents neither the bulls nor bears camp is in control at the moment. The upper (resistance) and lower (support) boundaries of the “Symmetrical Triangle” stands at 1968 and 1910 respectively.

Key levels (1 to 3 weeks)

Resistance: 1968 & 2040/2050

Support: 1910 & 1854/1835

Conclusion

Technical elements are mixed, thus we prefer to turn neutral between 1968 and 1910. Only a clearance above 1968 may unleash an upside movement to target the 2040/2050 significant pull-back resistance.

On the other hand, a break below 1910 is likely to see a slide to retest the “Black Monday”, 24 August 2015 low at 1854/1835.

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