Market Remarks

Morning Notes – Tuesday September 20, 2016

Sunil Sharma

Directional Bias For The Day:

  • The futures are up since NYSE session close on Monday
  • Tuesday after September expiry Friday is bearish for S&P 500 – 73% odds for a down day
  • Key levels for eMini futures: break above 2146.75 for bulls and break below 2135.50 for bears
  • Markets in the East were mostly down with only Australia and South Korea being up; China, Japan, Hong Kong and India were down
  • European markets are up following through to the up Monday, which also gapped-up at the open
  • On Monday, at 4:00 PM, S&P future (Dec contract) closed at 2131.25 and the index closed at 2139.12 – a spread of about 8.75 points

Key Levels:

  • Critical support levels for S&P 500 are 2138.28, 2135.91 and 2131.20
  • Critical resistance levels for S&P 500 are 2146.45, 2153.61 and 2157.57
  • Pre-NYSE session open, futures price action is to the up side; at 8:30 AM, S&P 500 futures was up by +7.50, Dow was up by +56.00 and NASDAQ was up by +17.25

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

Monthly
  • Up trend since Feb 08, 2016
Weekly:
  • Current uptrend under pressure
  • Fallen below an up-trending 10-week SMA
  • 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
  • Uptrend remains under pressure
  • Gave up 14 points gain to close by -0.4 points
  • End of day was weak
  • Not surprising for the Monday following September expiry Friday
  • 38.2% retracement from last low is 2116.59 and is  not breached
2-Hour (e-mini future)
  • On Monday afternoon, price fell back in the symmetrical triangle that it broke above in the morning; making another attempt to break out of it
  • Broke the sequence of lower highs / lower lows since September 12 but it hasn’t turned into a uptrend
30-Minute (e-mini future)
  • Steady rise after Monday afternoon decline but still below the high reached on Monday

Before NYSE Session Open

Monday was an up and down day. The promising start fizzled in the afternoon and then turned into red-ink. Mid-afternoon mini-rally didn’t hold till the end.

Major U.S indices were mixed. Big cap lost ground but small-cap advanced. S&P500 and Dow Jones Industrial Averages declined -0.4 and -3.63 respectively. NASDAQ lost -9.54 or -0.2% but Russell 2000 gained +7.75 or +0.6% and Dow Transportation Average gained +22.05 or -0.3%.

 

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