Market Diary – Friday July 22, 2016

Directional Bias For The Day:

• Greater likelihood of a range bound day with higher pressure for market to decline
• On 30-minute chart, S&P 500 future is within a symmetric triangle; breaks in either direction have immediate resistance levels
• Critical support levels for S&P 500 are 2158.43, 2155.79 and 2146.21
• Critical resistance levels for S&P 500 are 2173.95, 2181.30 and 2188.05
• Early morning futures price action is to the up side – at 7:45 AM, S&P 500 future was up by +3.75, Dow is up by +24.00 and NASDAQ is up by +6.00.

Before NYSE Session Open

During the morning session on Thursday, S&P 500, NASDAQ and Russell 2000 traded within a narrow range near previous close. At 11:30 AM they gave up the resistance and joined Dow Jones Industrial Averages and Dow Jones Transportation Averages in the decline. Dow Jones Industrial Averages is in danger of forming a-three-candle evening-star pattern if it closed below Thursday’s close of 18469.67.

Asian Session

The Asian bourses were mixed on Friday.

• Shanghai Composite was down by -26.19 or -0.86%
• Hang Seng was down -36.22 or -0.16%
• Nikkei 225 lost -192.97 or -1.09%
• Sydney’s S&P/ASX 200 lost -14.20 or -0.26%
• Sensex gained +92.72 or +0.33%
• South Korea’s KOSPI was down by -1.88 or -0.09%

European Session

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

• DAX is down by -11.88 or -0.12%
• FTSE-100 is up by +26.80 +0.40%
• CAC-40 is up by +0.07%, Spanish IBEX by +0.02%, Swiss SMI-SWX by +0.07%, and Italian FTSE MIB by +0.12%;
• STOXX-600 is down by -0.20%

Currencies

• U.S. Dollar index is up by +0.104 or +0.11% to 97.15; it is bouncing off the resistance turned support
• EUR/USD is down by -13.1 pips to 1.10129
• GBP/USD is down by -127.00 pips to 1.3091
• USD/JPY is down by -8.0 pips (Yen is stronger) to 106.181

Commodities

• WTI Crude is down by -0.04 or -0.09% to 44.71
• Natural Gas is up by +0.024 or +0.89% to 2.716
• Gold is down to -6.20 or -0.47% to 1324.80; Silver is down by -0.09 or -0.45% to 19.725
• Copper is down by -0.005 or -0.02% to 2.2580

Yields

• U.S. Treasury yields are up but below open following an up Wednesday, which also closed below open and off the high
• 30-year yield is up 1.7 basis points to 2.318% and 10-year is up by +2.4 basis points to 1.589%

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