Morning Notes – Thursday October 27, 2016

/ October 27, 2016

Directional Bias For The Day:

S&P 500 eMini Futures 27-Oct-16 7:00 AM

  • The futures are up
  • Breaking above a symmetrical triangle on 30-minute timeframe
  • Odds are for an up day

Markets Around The World

  • Markets in the East were mixed – Shanghai, Tokyo, Hong Kong and Sydney were down; Mumbai and Seoul were up
  • European markets are mixed – Germany, France and Spain are down; Italy and Switzerland are up
  • Dollar index and USD/JPY are down; EUR/USD and GBP/USD are up
  • Commodities are mostly up except for NatGas

Key Levels:

  • Critical support levels for S&P 500 are 2133.59, 2130.09 and 2124.57
  • Critical resistance levels for S&P 500 are 2145.73, 2152.41 and 2154.79
  • Key levels for eMini futures: break above 2140.00, the 11:00 AM high on October 26, for bulls and break below 2130.00, the low of 5:00 AM, for bears

Pre-Open

  • Pre-NYSE session open, futures price action is to the upside; at 7:00 AM, S&P 500 futures were up[ by +3.75, Dow by +20.00 and NASDAQ by +7.25
  • On Wednesday, at 4:00 PM, S&P future (Dec contract) closed at 2133.25 and the index closed at 2139.43 – a spread of about 6.25 points; futures closed at 2134.00 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
  • 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
  • Below the previously broken down trend line
  • Tuesday lost almost all gains of Monday; price broke above Monday’s low , which is not good
  • The 14-day RSI has come back to the downtrend line that it broke to the upside on Friday
  • For the down turn,  a break below 2114.74 will change the trend
2-Hour (e-mini future)
  • Fell back into the ascending triangle that it broke to the upside on October 20; fallen below the uptrend line, which started on 10:00 AM October 13
  • Downtrend since 10:00 AM on September 22 – mostly lower lows and lower highs; need to break above 2156.50 to break this downtrend line
  • Trying to regain the uptrend line that was broken/traced on October 26
30-Minute (e-mini future)
  • Forming a symmetrical triangle
  • Fallen back into the horizontal channel that it broke above at 3:30 AM on October 24 after a break above it that lasted one day; back to the middle of the channel
  • Down trend since 5:00 AM October 25

Previous Session

S&P 500 26-Oct-16Major U.S indices declined but their later session price-action was better. Most closed above their open.

Dow Jones Industrial Average made a large green bodied candle. It was also up for the day. S&P 500 made a near doji at the middle of the range. So did Dow Jones Transportation Average.

 

 

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