Market Diary – Tuesday Aug 30, 2016

Sunil Sharma

8 years ago

Directional Bias For The Day:

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

Major 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