Morning Notes – Friday October 21, 2016

/ October 21, 2016

Directional Bias For The Day:

S&P 500 21-Oct-16 7:00 AM

  • The futures are facing downward pressure
  • Downtrend since October 19 11: PM high of 2144.50
  • Odds are for a down day

Markets Around The World

  • Markets in the East were mostly down – except for Shanghai, which was up and Hong Kong, which was closed
  • European markets are mostly down; Spain being an exception
  • Dollar index is up but USD/JPY, EUR/USD and GBP/USD are down
  • Commodities are mostly down; except for oil and copper

Key Levels:

  • Critical support levels for S&P 500 are 2133.44, 2128.99 and 2114.74
  • Critical resistance levels for S&P 500 are 2148.44, 2153.92 and 2161.56
  • Key levels for eMini futures: break above 2135.75, break above a down trend line, for bulls and break below 2126.75, the low of 10:30 AM on October 20, for bears

Pre-Open

  • Pre-NYSE session open, futures price action is to the downside; at 7:00 AM, S&P 500 futures were down by -7.25, Dow by -61.00 and NASDAQ is down by -62.75
  • On Thursday, at 4:00 PM, S&P future (Dec contract) closed at 2135.00 and the index closed at 2141.34 – a spread of about 6.25 points; futures closed at 2137.00 for the day

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
  • A break below 2114.74 will change the trend as it would be first lower high / lower low
  • Need to rise above 2149.19 for short term up move
  • October 20 was a near doji, break above or below its highs or lows will give signals for next few day’s direction
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 but uptrend continues; price is beginning to break below the uptrend line
  • 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)
  • Uptrend since 10:00 AM October 13; At 11:00PM found resistance at the high of October 14, 10:00 AM and again on October 19 at 11:00 PM
  • Down trend line since October 19 11:00 PM high of 2144.50; a break below 2126.75 will start a new lower high lower low sequence

Before NYSE Session Open

S&P 500 20-Oct-16On Thursday, major U.S. indices went up the down and then up again, effectively ending close to open. S&P 500, Dow Jones Industrial Average and NASDAQ formed near dojis. Russell 2000 made a hammer pattern.

On daily chart, U.S. indices are showing a downtrend since making a high in August but most Eurpean indices are nearing a test of summer highs.

 

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