Market Diary – Friday Sep 02, 2016

/ September 2, 2016

Directional Bias For The Day:

ES_2Hr_160902_1

  • The futures were unchanged before Non-Farm Payroll release, S&P futures traded in a very narrow range from 4:00 PM high of 2169.00 to European session open low of 2164.75
  • Post 8:30 data release, S&P futures jumped almost ten points
  • For the past few days, at NYSE open, the futures were slightly changed and the day’s trading swung both ways with day’s close modestly changed from previous one;
  • Only one trend day (up) in the past six trading days – four down days of around -5 points and one up day of +11 points
  • The 5-day average range of 0.75% (from high-low) is 62% more than previous 5-day average
  • On Thursday at 4:00 PM, S&P future (Sept contract) closed at 2168.75 and the index closed at 2170.95 – a spread of about 2.25 points

Key Levels:

  • Critical support levels for S&P 500 are 2164.07, 2157.09, and 2147.58
  • Critical resistance levels for S&P 500 are 2173.56, 2182.27 and 2187.94
  • Pre-NYSE session open, futures price action is to the upside; at 8:15 AM, S&P 500 futures was up by +3.50, Dow was up by +25 and NASDAQ was up by +11.75

Economic Data:

Report Current Est. Prev.
U.S. Non-Farm Employment Change 151K 180K 255K
U.S. Unemployment Rate 4.9% 4.8% 4.9%
U.S. Avg. Hourly Earnings 0.1% 0.2% 0.4%
U.S. Trade Balance -39.5B -43.0B -44.5B
U.S. Factory Orders 2.1% -1.5%

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
  • Last swing low, 1991.68, was reached on June 27, 2016
Daily
  • Thursday was a doji candlestick; third day with some sort of indecision
  • A rally 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)
  • Drifting lower since 12:00 Noon high of 2182.25 on Aug 29
  • 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 2180.00 will break it
  • Last pattern – a symmetrical triangle – failed on Aug 24
  • Break below intermediate low of 2165.50 (Aug 17) between the double top highs of 2190.75 (Aug 15) and 2191.50 (Aug 23) did not last
  • Previous pattern – a rectangle trading range – is morphing into a broadening pattern with horizontal upper limit
30-Minute (e-mini future)
  • Sideways move since 12:30 PM Sep 1
  • Broke the previous higher-high/higher-low sequence from Aug 26 to Aug 29 on Aug 31
  • Facing a resistance at 2176.50, the high that it could not overcome for the past two days
  • Break the low of Wednesday on Thursday but recovered to close the day almost unchanged

Before NYSE Session Open

SPX_D_160901_EoDMajor U.S. indices were mixed on Thursday. The declined sharply at the open but then closed higher than those levels. Dow Transportation rose at the open and had the best showing.

On Thursday:

Up Down Last Notes
S&P 500   -0.09 or -0.0%  2170.86
  • Critical resistance of 2187.94, the Aug 26 high
  • Critical support of 2147.58, the Aug 2 low
Dow Jones Industrial Average +18.42 or +0.1%    18419.30
  • Crossed below 20-day EMA
  • Bouncing off 50-day EMA
NASDAQ Composite  +13.99 or +0.3%   5227.21
  • At 50-day EMA
Russell 2000   -0.10 or -0.0%  1239.80
  • Bouncing of 20-day EMA

Still Asian Session

Asian bourses were mixed on Friday:

Up Down Last Notes
Shanghai Composite +4.05 or +0.1%    3067.35
  • A down-sloping flag is in progress since Aug 15, which was 2016  high
  • 50-day EMA crosses above 200-day SMA
  • Uptrend since Jan 25 2016
Hang Seng  +104.36 or +0.5%   23266.70
  • Follow thru on the bullish engulfing of Thursday
  • Next resistance – Oct 2015 high of 23423.64
Nikkei 225   -1.16 or -0.0% 16925.68
  • At a resistance level of 16943.67 – upper limit of an ascending triangle on daily charts
  • Rising over a falling 39-week SMA
S&P/ASX 200   -42.80 or -0.8%  5372.80
  • On the CD leg of bearish ABCD pattern with target near 5370
  • At a prior-resistance-turned-support level
  • On 89-week SMA
  • Higher highs and higher lows since Feb 8 2016
Sensex +108.65 or +0.4%   28532.11
  • Target from the breakout of a rectangle trading box is near 28950
  • Near July 2015 high of 26576.32, which may act as a resistance
Kospi Composite +5.59 or +0.3%   2038.31
  • Still in a uptrend on daily timeframe; last swing low 1993.00 reached on Aug 3
  • Bouncing off 50-day EMA

European Session

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

Up Down Last Notes
DAX +16.29 or +0.2%   10550.60
  • Broken above weekly downtrend line since April 2015 and with two touches
  • At 89-week SMA and at 50-day EMA
FTSE-100 +37.30 or +0.85%   6803.47
  • Below 20-day EMA
  • At 10-week SMA
CAC-40 +29.09 or +0.7%   4468.76
  • Bouncing off 20-day EMA
IBEX +33.10 or +0.4%   8785.90
  • Rising up to falling 200-day SMA and 39-week SMA
FTSE MIB   -6.24 or -0.0% 16917.04
  • Facing resistance at 17122.82, the high point reached after Brexit on Aug 1
  • Trying to stay up flattening 20-day and 50-day EMAs
Swiss Market Index +47.66 or +0.6%   8190.30
  • Bouncing off a rising 50-day EMA and a falling 200-day SMA
STOXX 600 +2.59 or +0.8%   346.12
  • Bouncing off a rising 50-day EMA and a falling 39-week SMA

Currencies

Up Down Last Notes
US Dollar Index   -0.300 95.360
  • Dropped from a high of 95.825 to a low of 95.175 after U.S. payroll data
  • Finding resistance at flattening 50-day SMA
  • Struggling to stay above 20-day EMA and 10-day EMA
EUR/USD +30.9 pips   1.12270
  • Reaction to data release is mirror opposite of dollar index’s
  •  Finding support at the broken downtrend line from the high of May 3 2016
  • Bouncing off a falling 200-day SMA
GBP/USD +50 pips   1.33380
  •  At the upper limit of a symmetrical triangle at 30-year low levels
  • Bouncing off flattening 10-day and 20-day EMA
  • Rising above 50-day SMA
USD/JPY +14.2 pips   103.166
  • At a falling 50-day SMA

Commodities

Up Down Last Notes
WTI Crude +0.77 or +1.8%   43.97
  •  9.8% below Aug 19 high of 48.75
  • At flattening 39-week SMA
Natural Gas +0.018 or +0.6%   2.810
  • Broken above an up-sloping flag on Aug 25 and is back at the downtrend line, which is acting as a support
Gold +12.1 or +0.9%   1329.20
  • At the lower line of a slight down-sloping channel
Silver +0.372 or +2,0%   19.32
  • At the lower limit of a broken descending triangle, which is acting as a resistance
Copper +0.0120 or +0.6%   2.0875
  •  At the lower limit of a symmetrical triangle at the low levels since 2009

Yields

Up Down Last Notes
30-Year Treasury +1.9 basis points   2.249%
  • Finding resistance at falling 50-day SMA and flattening 10-day and 20-day EMAs
  • At the lower limit of a symmetrical triangle
10-Year Treasury +0.7 basis points   1.577%
  •  At slightly rising 10-day and 20-day EMA

Pivot Levels:

S&P 500 is below 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 2167.17 2166.42
R1 2183.64 27% 2178.08 25%
R2 2193.72 41% 2188.92 30%
R3 2193.72 46% 2200.58 25%
S1 2160.78 25% 2155.58 25%
S2 2150.70 51% 2143.92 43%
S3 2144.31 44% 2133.08 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

Print Friendly, PDF & Email

Related posts