sp 500 short term technical outlook potential bullish breakout from minor range configuration 267836

Tues, 11 October 2016

(Click to enlarge chart)

What happened earlier/yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has managed to stage a rally of 0.5% and printed a high of 2170 (right at the upper boundary of the minor “symmetrical triangle” range configuration in place since 10 October 2016 minor swing high) before it retraced close to a third of its gains at the end of yesterday’s U.S. session.

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

• Labour Market Conditions Index (Sep) @1400 GMT
• Alcoa (AA) Q3 2016 earnings announcement @1330 GMT – kick-starts the Q3 earnings reporting session

Key elements

• In today’s mid- European session, the Index has continued to inch lower and it is now resting just above a support of 2155 which is defined by yesterday’s 10 October minor swing low and the 61.8% Fibonacci retracement of the most recent up move from last Friday, 07 October low of 2144 to yesterday’s high of 2170.
• The lower boundary of the minor “symmetrical triangle” range configuration (depicted in dotted pink) now stands at 2149.
• Based on the Elliot Wave Principal and fractal analysis, last Friday’s 07 October low of 2170 may be the end of the minor “symmetrical triangle” range configuration and the Index is likely to shape an imminent potential bullish breakout after the third retest seen yesterday at the upper boundary of the “symmetrical triangle”.
• Momentum studies remain positive as the hourly Stochastic oscillator has just exited from its oversold region which suggests a potential upturn in price action of the Index at this juncture.

Key levels (1 to 3 days)

Intermediate support: 2155

Pivot (key support): 2149

Resistances: 2174 & 2180

Next support: 2135 (medium-term pivot)

Conclusion

The Index is likely to see a potential bullish breakout from its 2 weeks plus of range consolidation to open up scope for an up move to target the next resistances at 2174 and 2180 in the first step.

On the other hand, a break below the 2149 short-term pivotal support may invalidate the preferred direct rise scenario for another round of choppy decline to test the 2135 medium-term pivotal support.

Charts are from City Index Advantage TraderPro

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