Morning Notes – Monday October 24, 2016

/ October 24, 2016

Directional Bias For The Day:

S&P 500 eMini Future 24-Oct-16 6:45 AM

  • The futures are facing upward pressure
  • Uptrend since 9:30 AM on October 21 low of 2123.25
  • Breaking above an ascending triangle on 2-hour time-frame and a horizontal channel on 30-minute time-frame
  • Odds are for an up day

Markets Around The World

  • Markets in the East were mostly up – except for Sydney, which declined by -0,4%
  • European markets are mostly up; Switzerland being an exception
  • Dollar index is down; USD/JPY and EUR/USD are up; GBP/USD is down
  • Commodities are mostly down; except for silver 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 upside; at 6:45 AM, S&P 500 futures were up by +9.75, Dow by +78.00 and NASDAQ by +29.75
  • On Friday, at 4:00 PM, S&P future (Dec contract) closed at 2135.50 and the index closed at 2141.16 – a spread of about 5.75 points; futures closed at 2134.75 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
  • At the broken resistance or 2015 high; made a green harami within a large red candle of the week of October 10
Daily
  • Uptrend remains under pressure; need to rise above 2179.99 to relive the pressure
  • Again knocking on the previously broken down trend line
  • Friday looks to be a short term one-candle reversal; a break above 2148.44 is critical for up thrust
  • A break below 2114.74 will change the trend as it would be first lower high / lower
  • October 20 was a near doji, price broke below its low on Friday but quickly turned up setting it up for a fake move
2-Hour (e-mini future)
  • Regained the move up the uptrend line that was broken on October 20; uptrend since 10:00 AM October 13
  • Downtrend since 10:00 AM on September 22 – mostly lower lows and lower highs; broke above last high
  • Previously emerging inverse head-and-shoulder pattern morphed into an ascending triangle with 2144.50 as the upper limit
  • Breaking above the resistance of 2144.50
30-Minute (e-mini future)
  • Breaking above a horizontal channel after a fake break below it at 9:00 AM on October 21
  • Uptrend since 9:30 AM October 21

Previous Session

S&P 500 21-Oct-16On Friday, major U.S. indices swooned down at the open and then turned around. The low for the day was made during the first hour of trading. Dow Jones Industrial Average, S&P 500 and Russell 2000 made near dojis with very small upper shadow but longer bottom shadow.

Dow Transportation Average made a near hammer with lower shadow being 1.5 times the green body. It turned around after the first five minutes of trading. NASDAQ Composite turned around after ten minutes of trading. It is in uptrend since 10:30 AM on October 20. Unlike other indices it did not make a lower low on Friday than on Thursday.

 

 

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