Market Diary – Tuesday Aug 30, 2016

/ August 30, 2016

Directional Bias For The Day:

ES_2Hr_160830_2

  • The futures are directionless
  • S&P future are sideways since 11:00 AM on Monday
  • According to Stock Trader’s Alamanc, on the second to last trading day of August S&P 500 was up only 23.2% of times
  • On Monday at 4:00 PM, S&P future (Sept contract) closed at 2179.25 and the index closed at 2180.38 – a spread of about 1.00 points

Key Levels:

  • Critical support levels for S&P 500 are 2174.00, 2170.19, and 2164.73
  • Critical resistance levels for S&P 500 are 2183.48, 2187.75 and 2193.42
  • 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. S&P/Case-Shiller 5.1%  5.1% 5.2%
U.S. Conference Board Consumer Confidence (10:00 AM)   97.2 9.3
     
 

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
  • Monday was bullish engulfing candlestick
  • A rally above and close above 2193.42 will nullify the abandoned baby top reversal formed on Aug 24
  • 9-period RSI is diverging and showing a downtrend line; for rally to continue the down trend line needs to be broken
  • 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)
  • Still in downtrend – lower high, lower lows since 10:; AM on Aug 23; will break if future rise above 2186.75
  • Uptrend line from Aug 2 low was broken on Aug 24; it is acting as a resistance on the bounce
  • A downtrend line since 10:00 AM on Aug 23; a rise to 2185.00 will break it
  • Last pattern – a symmetrical triangle – failed on Aug 24
  • Emerging double top pattern did not last as the price rose above the low of 2165.50 between the two highs of 2190.75 and 2191.50
  • Previous pattern – a rectangle trading range – is morphing into a broadening pattern with horizontal upper limit
30-Minute (e-mini future)
  • Uptrend since 2:30 PM Aug 26 – higher lows, higher highs
  • Last pattern – ascending triangle broke to the upside
  • Emerging pattern – a down-sloping flag with high of 2182.25 – since 1:30 PM on Aug 29

Before NYSE Session Open

SPX_D_160829_EoDMajor U.S. indices bounced back from the Friday decline following a wild swing due to differing interpretation of Chair Yellen’s and Vice-Chair Fischer’s comments. Monday’s economic news was better for the market. S&P 500 and Russell 2000 made bullish engulfing candlestick formation and Dow Jones Industrial Average and NASDAQ composite gapped up at the open and closed higher.

On Monday:

Up Down Last Notes
S&P 500  +11.34 or +0.5%   2180.38
  • Critical resistance of 2187.94, the Aug 26 high
Dow Jones Industrial Average  +107.59 or +0.6%   18502.99
  • Broken a streak of 3 down days
NASDAQ Composite  +13.41 or +0.3%   5232.33
Russell 2000  +6.91 or +0.6%   1244.94

Still Asian Session

Asian bourses were mixed on Tuesday:

Up Down Last Notes
Shanghai Composite  +4.65 or +0.2%   3074.68
  • A down-sloping flag is in progress since Aug 15, which was 2016  high
Hang Seng  +194.77 or +0.9%   23016.11
  •  Poised to test the 2016 high of 23193.90
Nikkei 225   -12.13 or -0.1%  16725.36
  • A harami candlestick near the high of previous day
S&P/ASX 200  +9.10 or +0.2%   5478.30
  • Closed in the lower quarter of the day’s range following sharp decline on Monday
  • At a critical support of 5465.70; a convincing break below it will form ABCD pattern with target near 5370 level
Sensex  +440.35 or +1.6%   28343.01
  • Broke above the resistance of the upper limit of a rectangle trading box in progress since Jul 12; target near 28950
Kospi Composite  +7.39 or +0.4%   2039.74
  • 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 mostly up at 8:30 AM.

Up Down Last Notes
DAX  +107.03 or +1.0%   10651.47
  • Gap up open
  • Near day’s high
FTSE-100 -1.94 or -0.03%  6836.11
CAC-40  +36.35 or +0.8%   4460.60
  •  Gap up open
IBEX  +81.40   8699.00
  • Gap up open
FTSE MIB +212.55 or +1.3%   16867.77
  • Gap up open
Swiss Market Index  +51.84 or +0.6%   8235.93
  •  Gap up open
STOXX 600 +1.79 or +0.5%   344.99
  • Gap up open

Currencies

Up Down Last Notes
US Dollar Index  +0.262   95.805
EUR/USD   -4.0 pips  1.11634
GBP/USD  +26.0 pips   1.31050
USD/JPY  +17.7 pips   102.497

Commodities

Up Down Last Notes
WTI Crude  +0.32 or +0.7%   47.29
Natural Gas  +0.065 or +2.3%   2.919
Gold   -5.2 or -0.4%  1321.90
Silver   -0.038 or -0.2%  18.73
Copper -0.0040 or -0.2%  2.0705

Yields

Up Down Last Notes
30-Year Treasury +0.7 basis points   2.223%
10-Year Treasury +0.9 basis points   1.575%

Pivot Levels:

S&P 500 rose above 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 2178.02 2175.33
R1 2185.84 59% 2186.17 55%
R2 2191.31 43% 2193.08 32%
R3 2199.13 46% 2203.92 27%
S1 2172.55 36% 2168.42 36%
S2 2164.73 34% 2157.58 27%
S3 2159.26 24% 2150.67 19%

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 chance comes in picture only when R1 is broken. So are the probabilities calculated for R3, S2 and S3

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