Morning Notes - Tuesday October 18, 2016 : Market Remarks

Directional Bias For The Day:

The futures are up; futures making a bullish engulfing pattern on daily timeframe
Odds are for an up day
Key levels for eMini futures: break above 2135.50, the high of 4:30 AM, for bulls and break below 2128.00, the low of 11:00 PM, for bears
Markets in the East were mostly up
European markets are mostly up; most gapped up at the open and have maintained those levels
Dollar index is down so are EUR/USD, GBP/USD and USD/JPY
Commodities are mostly up
On Monday, at 4:00 PM, S&P future (Dec contract) closed at 2120.25 and the index closed at 2126.50 – a spread of about 6.25 points; futures closed at 2123.00 for the day

Key Levels:

Critical support levels for S&P 500 are 2124.43, 2114.74 and 2105.04
Critical resistance levels for S&P 500 are 2134.71, 2142.45 and 2149.19
Pre-NYSE session open, futures price action is to the upside; at 7:00 AM, S&P 500 futures were up by +10.25, Dow by +70.00 and NASDAQ by +26.00

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; need to rise above 2187.87 to relieve the pressure 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 In danger of making a small bearish ABCD pattern; a break below 2119.12 will complete it with a target near 2104 level
*Daily*	Uptrend remains under pressure; need to rise above 2179.99 to relive the pressure Turning down from the previously broken down trend line after a test 20-day EMA crossed below 50-day EMA on October 13
*2-Hour (e-mini future)*	Downtrend since 10:00 AM on September 22 – mostly lower lows and lower highs; advance above 2143.25 will break this sequence Bounce from October 13, 8:00 AM low turned down at 2143.25 at prior support-turned-resistance level Possible emergence of a right-shoulder of an inverse head-and-shoulder pattern; a break above 2143.25 will trigger it
*30-Minute (e-mini future)*	Down trend since 10:00 AM on October 14 Turned up in between the 61.8% and 78.6% Fibonacci retracement level of the rally from 10:00 AM October 13 low of 2107.75 to October 14 high

Before NYSE Session Open

On Monday, major U.S. indices continued the downtrend that they had started at 10:00 AM on Friday.

The three day candlestick pattern for S&P 500 looks bearish, though, it is not a classic pattern. The first candle is a near doji wilt long lower tail. The second candle looks like a shooting star with a long upper tail. It gapped-up at the open and made a higher high than the first candle. The third candle is a red candle, which closed below second candle’s low but did not breach the first candle’s low. The patterns is similar for other major indices except for Russell 2000, whose second candle did not make a higher high than first candle.