Market News & Analysis

S&P 500 – Further potential upside above 2265/58 support

Short-term Technical Outlook (Fri, 06 Jan 2016)

sp500-1-hour_06-jan-2017(Click to enlarge charts)

What happened earlier/yesterday

The U.S. SP 500 Index (proxy for the S&P 500 futures) has managed to shrug off its initial weakness (down by 0.4%) in the first half on the U.S. session triggered by a weaker than expected ADP employment – a prelude to nonfarm payrolls for December 2016 where it has shown to have added 153K jobs versus a market expectation of 170K.

However, the Index has managed to stage a recovery and close its U.S. session at an intraday high of 2271 where it has maintained its bullish bias since the start of the week. Please click on this link for a recap on our latest weekly technical outlook/strategy published on this Monday, 02 January 2017.

Today’s key U.S economic data release/events

  • Nonfarm payrolls for Dec @1330GMT  -  178K consensus
  • Factory Orders for Nov @1500GMT – -2.2% m/m consensus
  • Fed’s Evans speech @1715GMT

Key elements

  • Yesterday’s decline in price action has managed to stall right above its key short-term support at 2258 defined by a confluence of elements (the lower boundary of a short-term ascending channel in place since 31 Dec2016 low, the minor swing high area of 03 January 2017 & the 50% Fibonacci retracement of the recent up move from 04 January 2017 minor swing low to 05 January 2017 high of 2273.
  • Based on the Elliot Wave Principal and fractal analysis, yesterday’s decline can be considered as the corrective minute degree corrective wave iv and the Index now is likely to shape the minor degree bullish impulsive wave 5.
  • The hourly Stochastic oscillator has also dipped down and it is now hovering just above an extreme oversold level. This observations reinforce the a potential bullish price action reversal at this juncture.

Key levels (1 to 3 days)

Intermediate support: 2265

Pivot (key support): 2258

Resistances: 2278 (current all-time high), 2285 & 2303

Next support: 2232


As long as the 2258 short-term pivotal support holds, the Index is likely to shape another potential upleg to retest 2278 before target the next resistances at 2285 follow by 2303 next.

On the other hand, a break below 2258 may negate the preferred bullish scenario to see a deeper decline towards the next support at 2232 (31 Dec 2016 swing low area).

Charts are from City Index Advantage TraderPro


The material provided herein is general in nature and does not take into account your objectives, financial situation or needs. While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments. City Index recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets. It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. GAIN Capital Australia Pty Ltd (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.




From time to time, GAIN Capital Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.