Market Diary – Monday Aug 29, 2016

/ August 29, 2016

Directional Bias For The Day:

ES_2Hr_160828_1

  • The futures are directionless
  • Follow through on Friday’s wild swing is possible in either direction
  • An ascending triangle is emerging on 30-minute charts and break in either direction will set the tone for the next few hours
  • S&P500’s swing low of 2168.50 was taken out; next swing low is 2147.58
  • On Friday at 4:00 PM, S&P future (Sept contract) closed at 2168.00 and the index closed at 2169.04 – a spread of about 1.00 points

Key Levels:

  • Critical support levels for S&P 500 are 2160.39, 2156.97, and 2147.58
  • Critical resistance levels for S&P 500 are 2173.08, 2184.52 and 2187.94
  • Pre-NYSE session open, futures price action is sideways; at 8:30 AM, S&P 500 future was up by +2.00, Dow was up by +12 and NASDAQ was up by +2.50

Economic Data:

Report Current Est. Prev.
U.S. Core PCE Price Index 0.1% 0.1% 0.1%
U.S. Personal Spending 0.3% 0.3% 0.5%
U.S. Personal Income 0,4% 0,4% 0.3%
 

The trend and patterns on various time frames for S&P 500 are:

Monthly
  • Up trend since Feb 08, 2016
Weekly
  • Up trend since Feb 08, 2016 with one pullback; broke out of a 2-year trading range in July, 2016
Daily
  • Uptrend under pressure after an abandoned baby top reversal on Aug 24
  • 9-period RSI is diverging and showing a downtrend line
  • Uptrend since June 28th with one pullback; last swing low 2147.58 on Aug 2
  • Mostly sideways move since August 5
  • 61.8% retracement from last low is 2116.59
2-Hour (e-mini future)
  • Downtrend – lower high, lower lows since 10:; AM on Aug 23 following the 30-minute chart
  • Uptrend line from Aug 2 low was broken on Aug 24
  • Last pattern – a symmetrical triangle – failed on Aug 24
  • The current pattern is a rectangle trading range – high 2191.50 and low 2165.50 – was breached on Aug 26, now the price is again within the trading range
30-Minute (e-mini future)
  • Downtrend since 10:00 AM Aug 23; lower lows, lower highs
  • Last pattern – rectangle trading box that was emerging since 3:30 PM on Aug 24 – failed to emerge
  • Bouncing off after sharp swing on Friday, in the process an ascending triangle is emerging

Before NYSE Session Open

SPX_D_160826_EoDMajor U.S. indices had a wild swing on Friday. First Chair Yellen’s speech was received with some relief and the indices rallied. However, then Vice-Chair Fischer’s comments to CNBC dampened the mood and the market fell – S&P 500 lost more than 26 points by falling from a post-Yellen speech high of 2187.94 to post-Fischer comments of 2160.39. However, indices recovered from the lows and closed the day with modest losses despite wild intraday swing. NASDAQ Composite even closed up for the day.

On Friday:

Up Down Last Notes
S&P 500   -3.43  (-0.2%) 2169.04
  • Critical support of previous swing low of 2168.50 was broken
Dow Jones Industrial Average   -53.01  (-0.3%) 18395.40
  • Next swing low of 18247.79 is fair game now
NASDAQ Composite  +6.72 or +0.1%   5218.92
  • A near doji for the day
  • Bouncing off 20-day EMA
Russell 2000   -1.97 or -0.2%  1238.03
  • Critical level is 1221.72, low reached on Aug 17
  • Still above 20-day EMA

Still Asian Session

Asian bourses were mixed on Monday:

Up Down Last Notes
Shanghai Composite    -0.28 or (-0.0%) 3070.03
  • A down-sloping flag is in progress since Aug 15, which was 2016  high
Hang Seng   -88.20 or (-0.4%)  22821.34
Nikkei 225  +376.78 or +2.3%   16737.49
  • Gap-up open and an abandoned baby bottom reversal in a trading range
S&P/ASX 200   -46.30  (-0.8%) 5469.20
  • Sharp decline nullified the emerging pattern of up-sloping flag on 30-minute chart
  • At a critical support of 5465.70; a convincing break below it will form ABCD pattern with target near 5370 level
Sensex  +120.41 or +0.4%   27902.66
  • Near the lower limit of a rectangle trading box in progress since Jul 12
Kospi Composite   -5.15  (-0.3%) 2032.35
  • Still in a uptrend on daily timeframe; last swing low 1993.00 reached on Aug 3

European Session

In pre-US session, the European stock markets are mixed at 8:30 AM.

Up Down Last Notes
DAX   -61.68 (-0.6%) 10526.09
FTSE-100  +26.00 or +0.36%   6844.00
CAC-40   -33.14 or (-0.7%)  4408.73
IBEX   -53.40 (-0.6%) 8606.10
FTSE MIB    -204.93 (-1.2%) 16639.06
Swiss Market Index  +9.54 or +0.1%   8177.86
STOXX 600   -1.09 (-0.3%) 342.63

Currencies

Up Down Last Notes
US Dollar Index  +0.228   95.770
EUR/USD   -1.7 pips  1.11645
GBP/USD   -1.0 pips  1.30680
USD/JPY  +1.3 pips   102.245

Commodities

Up Down Last Notes
WTI Crude    -0.77 or -1.6% 46.87
Natural Gas   -0.001 or -0.0% 2.870
Gold   -1.9 or -0.1%  1324.00
Silver   -0.056 or -0.3%  18.60
Copper -0.0010 or -0.0%  2.0775

Yields

  • U.S. Treasury yields are down for the day so far
  • 30-year yield is down by -5.4 basis points to 2.240% and 10-year is down by -1.6 basis points to 1.561%
Up Down Last Notes
30-Year Treasury -5.0 basis points 2.246%
10-Year Treasury -4.0 basis points 1.595%

Pivot Levels:

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

S&P 500 Cash eMini Futures
 Daily Level Break
Chance		 Level Break
Chance
Pivot 2172.46 2170.92
R1 2184.52 27% 2184.33 26%
R2 2200.01 41% 2200.17 30%
R3 2212.07 46% 2213.58 25%
S1 2156.97 25% 2155.08 25%
S2 2144.91 52% 2141.67 43%
S3 2129.42 45% 2125.83 35%

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

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