sp 500 daily outlook for fri 23 jan potential final push up towards 20752078 before risk of setback

What happened yesterday

The S&P 500 has continued to rally and met our target at 2053/2057 as expected. Please click on this link for more details on our previous day’s outlook.

Key elements

The Index has continued to stage a further upside movement towards the upper limit (2075/2078) of the short-term ascending channel (in orange) in place since 16 January 2015.
The 2075/2078 resistance also confluences with a Fibonacci cluster.
The 34-period Moving Average is coming to support the Index at around 2049.
The 2049 level also coincides with the 23.6% Fibonacci retracement from 21 January 2015 low to its current high.
The Stochastic oscillator has dipped into the oversold region.

Key levels

Pivot (key support): 2049

Resistance: 2064 & 2075/2078

Next support: 2028/2025

Conclusion

The short-term bullish trend in place since 16 January 2015 low remains intact for the S&P 500. As long as the daily pivotal support at 2049 holds, the Index is likely to stage a potential push up towards 2064 before 2075/2078.

*A point of caution is that we are likely in the final stage of this short-term bullish trend based on the fractal approach (Elliot Wave) and we may start to see a setback (wave 4) below 2075/2078.

On the other hand, failure to hold above 2049 may invalidate the “push up scenario” to see a slide towards the next support at 2028/2025 (also the lower limit of the short-term ascending channel).

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