Morning Notes – Thursday November 3, 2016

Sunil Sharma

8 years ago

Directional Bias For The Day:

The futures are up and broken above a down trend line on 30-minute timeframe
S&P 500 has been down for seven consecutive day; before yesterday, it had happened only twice since 2010 and the streek ended at seven
Odds are for a bounce

Markets Around The World

Markets in the East were mostly down – Seoul was the exception and Japan was closed
European markets are mostly up after opening with a gap-down – Switzerland is the only exception
Dollar index and EUR/USD are down; USD/JPY and GBP/USD are up
Commodities are mixed – Crude oil, and copper are up; NatGas, gold and silver are down

Key Levels:

Critical support levels for S&P 500 are 2094.00, 2090.71, and 2083.47
Critical resistance levels for S&P 500 are 2105.05, 2113.12, and 2118.99
Key levels for eMini futures: break above 2098.75, the 7:00 AM high, for bulls and break below 2086.25, the low of 3:30 AM, for bears

Pre-Open

Pre-NYSE session open, futures price action is to the up side; at 9:00 AM, S&P 500 futures were up by +4.25, Dow by +37.00 and NASDAQ by +3.75
On Wednesday, at 4:00 PM, S&P future (Dec contract) closed at 2092.00 and the index closed at 2097.94 – a spread of about 6.00 points; futures closed at 2092.25 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 2154.79 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 Broke below a small bearish ABCD pattern with a downside target near 2105.30 (100% – met), 2076.77 (138.2%), 2067.96 (150%), 2059.14 (161.8%) Broken below 2015 high, which was acting as a resistance
*Daily*	Down trend – 1) broken below an uptrend line; 2) Lower high lower low; 3) turned back from the broken uptrend line on a bounce Falling below the lower limit of a descending triangle A break above Wednesday high of 2111.76 would mark a reversal pattern
*2-Hour (e-mini future)*	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 Lower high / lower lows since 4:00 AM October 25 Bounced above a large red-candle of 10:00 PM on November 2; a break above 2106.50 would start a reversal
*30-Minute (e-mini future)*	Down trend since 5:00 AM October 25 Broke above a sharper down trend line since 3:00 AM on November 1 Made first higher high and higher low since 11:00 PM on November 2

Previous Session

U.S. markets continued their decline on Wednesday. Pre-session up-move in futures did not survive the first half hour of trading. Afterwards it was all downhill for most major indices.

S&P 500 and NASDAQ Composite extended their down streak to seven days. Dow Jones Industrial’s streak is at five. All, including Russell 2000 and NYSE Composite, breached Tuesday’s low.

Dow Transportation average bucked the trend. It did not fall below Tuesday’s low and closed up for the day. It still remains the best looking chart.