Market Remarks

Morning Notes – Thursday September 29, 2016

Sunil Sharma

Directional Bias For The Day:

  • The futures are drifting lower since 1:30 AM high of 2167
  • Second to last trading day in September is 57% bullish for S&P 500 – down three out of last six years
  • Odds are for a down day
  • Key levels for eMini futures: break above 2164, 7:30 AM high, for bulls and break below 2155 for bears
  • Markets in the East were mostly up except for Mumbai, which declined -1.6%
  • European markets are mostly up but sharply down from early-session high
  • On Wednesday, at 4:00 PM, S&P future (Dec contract) closed at 2163.75 and the index closed at 2171.37 – a spread of about 7.50 points

Key Levels:

  • Critical support levels for S&P 500 are 2165.89, 2157.97 and 2151.79
  • Critical resistance levels for S&P 500 are 2173.75, 2179.99 and 2184.94
  • Pre-NYSE session open, futures price action is to the downside; at 8:45 AM, S&P 500 futures were down by -3.75, Dow by -29.00 and NASDAQ is down by -9.00

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
  • Wednesday followed through Tuesday’s bullish engulfing candle
  • Back within the rectangle trading range that was once broken on September 9
2-Hour (e-mini future)
  • Sequence of Higher high and higher lows since 10:00 PM on September 22 not broken; break above 2172.75 will extend it
  • Within this, another higher high and higher low sequence since double bottom at 8:00 AM on September 27
30-Minute (e-mini future)
  • Drifting down since 1:30 AM
  • Price at the broken downtrend line from above and previous resistance turned support of September 28 4:00 AM high
  • Higher high and higher low since the double bottom of 9:00 AM September 27

Before NYSE Session Open

On Wednesday, major U.S. indices followed through on large gain on Tuesday. In the process, they closed the gap formed on Monday.

Dow Jones Industrial Average and S&P 500 are back in the rectangle trading zone that they are breaking below. NASDAQ Composite got back above its similar congestion area and Russell 2000 is continuing its upward move.

 

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