Morning Notes – Thursday December 1, 2016

/ December 1, 2016

Directional Bias For The Day:

S&P 500 eMini Future (2-Hourly) 1-Dec-16 9:00 AM

  • The futures are drifting higher since 7:30 AM
  • Declined consistently from 1:30 PM on Wednesday till 1:30 AM and then it drifted sideways till 7:30 AM
  • Odds are for a down to sideways

Markets Around The World

  • Markets in the East were mostly up – only Indian SENSEX was down
  • European markets are mixed – DAX, CAC-40, FTSE 100 and Swiss SMI are down; IBEX-35 and FTSE-MIB are up
  • Dollar index is down; EUR/USD, USD/JPY and GBP/USD are up
  • Commodities are mostly up – only gold is down

Key Levels:

  • Critical support levels for S&P 500 are 2198.15, 2193.71 and 2188.62
  • Critical resistance levels for S&P 500 are 2206.26, 2214.10 and 2219.20
  • Key levels for eMini futures: break above 2205.50, high at 3:00 PM on November 30, and break below 2195.50, the low of 7:30 AM

Pre-Open

  • Pre-NYSE session open, futures price action is to the upside – at 9:00 AM, S&P 500 futures were up by +3.75, Dow down by +35.00 and NASDAQ by +0.75
  • On Wednesday, at 4:00 PM, S&P future (Dec contract) closed at 2198.00 and the index closed at 2198.81 – a spread of about 1.00 points; futures closed at 2198.75 for the day

The trend and patterns on various time frames for S&P 500 are:

Monthly
  • Up trend since Feb 08, 2016
Weekly:
  • Candlestick for the current week is emerging to be a harami candle, within a larger green candle
  • Uptrend resumed; broken above a downtrend line since August 15 high
  • Above an 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 the low on June 27, 2016
  • Broke below a small bearish ABCD pattern with a downside target near 2105.30 (100% – met), 2076.77 (138.2% – came close), 2067.96 (150%), 2059.14 (161.8%)
  • Moved above 2193.81, which nullified the break below 2015 high made in early November
  • Above 39-week SMA and 89-week SMA
Daily
  • Wednesday was bearish engulfing candle
  • Tuesday low was not breached and it is still critical
  • Above 100-day, 200-day, 50-day and 20-day SMA
  • Down trend line broken to the upside; trend line retaken on November 21
  • Sequence of higher highs and higher lows
  • Broken above the August high of 2193.81, the then all time
2-Hour (e-mini future)
  • At the lower limit of a rectangle trading range, low of 8:00 AM on November 29
  • Within a narrow range – upper limit bounded by 2111.75, high on November 25 at 12:00 PM and lower by 2196.25, low on November 29 at 8:00 AM
  • Broken above a resistance zone – 2180-to-2185; which was also the upper limit of an ascending triangle; target near 2212; high reached on Friday was 2211.75
  • Broke a symmetrical triangle to the upside at 2:00 PM on November 15; reached the target near 2198 – 2200
  • At 20-bar EMA which is above 50-bar EMA
30-Minute (e-mini future)
  • Bouncing off the lows below 9:30 AM low of 2202.50 on November 29 but above the 9:30 AM low of 2192.00 on November 23
  • Tracing a rectangle trading range bounded by 2213.75 and 2194.25
  • Crossing 20-bar and 50-bar EMA

Previous Session

S&P 500 30-Nov-16U.S. indices were mixed on Wednesday, November 30 2016. Dow Jones Industrial Average , Dow Transportation Average and NYSE Composite advanced but S&P 500, NASDAQ Composite, Russell 2000 and Wilshire 5000 Total Market Index declined. They all made different types of candlestick patterns.

S&P 500 was up at the open but then gave that up and then some  more. In the process it made a near bearish engulfing candle with long upper shadow. Dow Jones Industrial Average made an almost shooting star candle. NASDAQ Composite made a bearish engulfing pattern with almost no upper and lower shadow. Dow Transportation Average made a bullish engulfing pattern. Wilshire 5000 made a bearish pattern and NYSE Composite gapped up at the open but the closed near the lows, which was still above yesterday’s close.

Bottom line is that no market index is taking a lead and the near term market action would be indecisive in either direction.

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