Market Diary – Tuesday July 12, 2016

Directional Bias For The Day:

• The bias is to the up side
• On 30-minute chart, S&P 500 futures broke above a symmetric triangle on Monday and so far the price has stayed above it after a brief decline to test the breakout level
• Critical support levels for S&P 500 are 2128.75 and 2122.50
• Critical resistance levels for S&P 500 are 2148.79 and 2154.41;
• Early morning futures price action is to the upside – at 8:45 AM, S&P Futures up by +10.00, Dow futures by +73.00 and NASDAQ by +24.75

Before NYSE Session Open

On Friday, S&P 500 jumped up after June’s Non-Farm Payroll gains came at a higher level than expected.

The S&P 500 reached a high 2131.71 before closing at 2129.90 for a gain of +32.00 or +1.52%. This is slightly below all time high of 2134.72 reached in May 2015.

The Dow Jones Industrial Averages gained +250.86 or +1.4% to 18146.74. NASDAQ Composite was up by +1.54% and Russell 200 was up by +2.40%.

Asian Session

The Asian bourses were mostly up on Tuesday after all time high close in S&P 500 on Monday.

• Shanghai Composite was up by +54.464 or +1.82% to 3049.38 breaking above a short and narrow rectangle trading range; the next resistance is near 3097.16
• Hang Seng was up +344.24 or+1.65% and it also broke above the symmetric triangle that it has been carving out since April 28, 2016
• Nikkei 225 continued its bounce post-Abe victory; it was up +386.83 or +2.46%; it is near the resistance created by the high post-Brexit vote on June 24th when it dropped -9.3% from high to low
• Sydney’s S&P/ASX 200 gained +16.1 or +0.30%; it broke above an inverse head-&-shoulder pattern after a short decline and is in the middle of a rectangle trading range that it broke below on June 14th
• Sensex followed through on it’s Monday gap up by gaining +181.45 or  +0.66%,
• South Korea’s Kospi gained +0.14%

European Session

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

• DAX is up by +118.34 or +1.20%; it continues to fill June 24th gap down and has broken above a resistance that it formed on July 1st
• FTSE-100 is down -7.56 or -0.11% to 6675.30 at 8:15 AM; it was up half hour ago
• CAC-40 is up by +1.31%, Italian FTSE MIB by +1.74%, Spanish IBEX by +1.64% and STOXX-600 by +0.72%and are making chart pattern similar to that of DAX
• Swiss SMI-SWX is down by -0.11%

Currencies

• U.S. Dollar index is down by -0..33 and has fallen back in the the handle of an uneven cup-with-handle pattern
• EUR/USD is up by +36.7 pips to 1.10976; GBP/USD is up by +171 pips to 1.3161 and near a resistance
• USD/JPY is up by +115.00 pips (Yen is weaker) to 103.90; breaking above a resistance of 103.395; next resistance is 106.84, the high attained before Brexit vote on June 23rd

Commodities

• WTI Crude is up by +1.04 to 45.82 and is knocking at the lower limit of  a descending triangle that it broke below on July 7th
• Natural Gas is up by +0.96% to 2.728
• Gold is down by -8.5 to 1348.1; Silver is up by +0.136 to 20.440
• Copper is up by +1.68% to 2.1835

Yields

• U.S. Treasury yield gapped; at 8:30 AM 30-year is up to 2.201% and 30-year to 1.474%

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