Market Diary – Friday July 8, 2016

Directional Bias For The Day:

• The bias is to the up side
• The joker in the deck is the Non-Farm Payroll report, which may change the complexion of the market
• On 30-minute chart, S&P 500 futures is within the upper range of a rectangle trading box, after bouncing off the support; the rectangle is within another bigger rectangle box
• Critical support levels for S&P 500 are 2088.50 and 2079.10
• Critical resistance levels for S&P 500 are 2110.08 and 2118.48;
• Early morning futures price action is to the upside

Before NYSE Session Open

On Thursday, S&P 500 made an intraday reversal, which was mirror image of its intraday reversal on Wednesday.

On Wednesday, S&P 500 lost -1.83 or -0.09% after being up more than 10 points mid-day. However, S&P 500 also bounced up nicely in the last hour of NYSE trading, by then it was down by ten points from Tuesday’s close.

The Dow Jones Industrial Averages declined by -22.74 or -0.13%. NASDAQ Composite, on the other hand, gapped up at the open and closed up +17.65 or +0.36%. Dow Transportation Averages and Russell 2000 were up by +0.46% and +0.21% respectively. The market action on Wednesday decidedly turned

Asian Session

The Asian bourses were mostly down overnight.

• Shanghai Composite was down by -28.75 or -0.95% to 2988.09; it is making a 3-candle evening star pattern; the critical level is 2084.83
• Hang Seng was down -142.75 or -0.69%
• Nikkei 225 declined by -169.26 or -1.11%, rushing toward a rendezvous with the lows of 14864.01 reached on June 24th in the aftermath of Brexit.
• Sydney’s S&P/ASX 200 gained +2.60 or +0.05% and made an indecisive doji candlestick
• Sensex was down -74.59 or -0.27% and made a bearish engulfing of a harami doji of Wednesday
• South Korea’s Kospi gave up all the gains of Wednesday and was down -10.98 or -0.56%

European Session

In pre-US session, European stock markets are mostly up.

• DAX is up by +124.41 or +1.32% after opening at he lows of a down Thursday; STOXX 600 is up by +0.66%
• FTSE-100 is up +12.87 or +0.20% after making a piercing candle on Thursday which closed up high within a red Wednesday candle
• CAC-40 is up by +1.33%; Italian FTSE MIB is up by +2.89% and Spanish IBEX-35 is up by +1.99% and they all are making chart pattern similar to that of DAX
• Swiss SMI-SWX is up by +0.10%

Currencies

• Before the Non-Farm Payroll release, U.S. Dollar index was marginally down to 96.135; positive NFP propelled it to 96.383 or +0.15% for the day
• EUR/USD is down up by -23.5 pips to 1.10370 at 8:50 AM;
• GBP/USD is up by +31 pips to 1.2946
• USD/JPY is up by +9.60 pips (Yen is weaker) to 100.856 in a downtrend

Commodities

• WTI Crude is up by +0.30 or +0.64% to 45.43; Natural Gas is up by +0.29%
• Gold is down by -11.80 or -0.87% to 1350.30; Silver is down by -0.288 or -1.45% to 19.550
• Copper is up by +0.52% to 2.1335

Yields

• U.S. 30-years is marginally up to 2.148 after being marginally down before NFP data
• U.S. 10-years is up by 26 basis points to 1.413

Pivot Levels:

S&P 500 is above its 10-D EMA, 10-D EMA crossed above 20-D EMA and its 20-D EMA is trending above 50-D EMA since March 9, 2016.

Note: The probability of a level breaking is shown above is for the current condition when the price is above 20-D EMA, 10-D EMA is above 20-D EMA and 20-D EMA is above 50-D EMA. R2 break probability comes in picture only when R1 is broken. So are the probabilities calculated for R3, S2 and S3