sp 500 weekly outlook for 03 aug to 07 aug potential push up to retest the 21282138 range top 957682

(Click to enlarge charts)

What happened earlier

The U.S. SP 500 Index (proxy for the S&P 500) has managed to stage the expected pull-back from the predefined risk zone of 2128/2138.

Please click on this link for more details on our last weekly outlook.

Key elements

• The Index has continued to evolve within a 5-month sideways range configuration in place since late February 2015. The range top stands at 2128/2138 (see daily chart).
• The long-term bullish trend since 02 October 2011 low remains intact as the Index continues to evolve above the lower boundary (support) of the ascending channel (in light blue) and 55-week Moving Average which both confluences at the 2040 level (see weekly chart).
• The recent decline of 3.2% seen from its 21 July 2015 high of 2132 has managed to stall at a trendline support which is now at 2076 (see 4 hour chart).
• The 2076 trendline support also corresponds with the 76.4% Fibonacci retracement of the recent upmove from 27 July 2015 low @8pm to 31 July 2015 high @8pm (see 4 hour chart).
• The short-term Stochastic oscillator has managed to inch higher just above its oversold region (see 4 hour chart).

Key levels (1 to 3 weeks)

Intermediate support: 2087

Pivot (key support): 2076

Resistance: 2128/2138

Next support: 2045/2040

Conclusion

The Index continues to trade within a multi-month sideways configuration. As long as the 2087/2076 key support zone holds, the Index is likely to see a push up to retest the range top (resistance) at 2128/2138.

However, a break below 2076 pivotal support is likely to jeopardise the bullish tone for a slide to retest the key long-term support at 2040.

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