sp 500 weekly outlook 14 sep to 18 sep within sideways range configuration with 1994 as potential up

(Click to enlarge charts)

What happened last week

The U.S. SP 500 Index (proxy for the S&P 500) had a failure bullish breakout above the 1968 upper limit of the neutrality range and traded sideways. Please click on this link for a review on our previous weekly outlook.

Let us review its current technical elements in this crucial week where the U.S. central bank (Fed) will decide whether to hike the benchmark overnight interest rate since 2008.

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 continued to evolve in a sideways range configuration with resistance now at 1994 and trendline support at 1938 (see 4 hour chart).

Key levels (1 to 3 weeks)

Pivot (key support): 1938

Resistance: 1994 & 2040/2050

Next support: 1910 & 1854/1835

Conclusion

The Index has continued to evolve within a sideways range configuration and the 1994 intermediate resistance needs to be taken in order to gain impetus for a potential rally to target the 2040/2050 significant pull-back resistance.

However, failure to hold above the 1938 weekly pivotal support may see a decline towards 1910 and even the “Black Monday”, 24 August 2015 low at 1854/1835.

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