Morning Notes – Monday December 5, 2016

/ December 5, 2016

Directional Bias For The Day:S&P 500 eMini Futres (2-hourly) 5-Dec-16 8:30 AM

  • The futures are higher but trending down 4:00 AM
  • Above an uptrend line on 30-min chart
  • European stocks are higher but trending down since early session
  • Odds are for an up to sideways day
  • Watch out for break of key levels for the futures – 2202.50 for an upside move and 2197.25 for a downside move

Markets Around The World

  • Markets in the East were mostly down – only Indian Sensex bucked the trend
  • European markets are mostly up – Italy is the only one in red
  • Dollar index, GBP/USD and USD/JPY are down; EUR/USD is up
  • Commodities are mixed – crude, NatGas and copper are up; gold and silver are down
  • 10-yrs yield is at 2.434% up from Friday’s close of 2.390%; 30-years at 3.108% up from 3.061%

Key Levels:

  • Critical support levels for S&P 500 are 2188.37, 2180.52 and 2172.30
  • Critical resistance levels for S&P 500 are 2197.95, 2205.71 and 2214.10
  • Key levels for eMini futures: break above 2202.50, high at 6:30 AM, and break below 2197.25, the high of 11:00 AM on December 2

Pre-Open

  • Pre-NYSE session open, futures price action is to the upside – at 8:45 AM, S&P 500 futures were up by +8.00, Dow down by +80.00 and NASDAQ by +21.25
  • On Friday, at 4:00 PM, S&P future (Dec contract) closed at 2191.00 and the index closed at 2191.95 – a spread of about one points; futures closed at 2192.00 for the day

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

Monthly
  • Up trend since Feb 08, 2016
Weekly:
  • Candlestick for the last week was a large 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
  • Pulling back for the last five days
  • On Friday, index rose for first hour and then retraced, eventually closing near Thursday’s open
  • Support levels are: 1) 2179.99, the high point reached on September 22; and 2) 2163.85, the 38.2% Fibonacci retracement of the rally from the low of November 4.
  • Above 100-day, 200-day, 50-day and 20-day SMA
  • Sequence of higher highs and higher lows
2-Hour (e-mini future)
  • Made low at 6:00 PM on Sunday, which is near the lower limit of a congestion zone on November 18
  • The low was followed by a large green candle at 2:00 AM or nearly 23 points
  • Down trend since 8:00 AM November 30 high; recent surge broke above the last lower high of 10:00 AM, December 2
  • Above 50-bar EMA which is above 20-bar EMA
30-Minute (e-mini future)
  • Broke the down trend line that began at 9:00 AM on November 30; two touches to the trend line
  • Bouncing off the low of 2179.00, which was a prior resistance level
  • Near a resistance level 2203.00, the high reached on December 1
  • Above an up sloping 20-bar EMA but just crossed above a rising 50-bar EMA

Previous Session

S&P 500 2-Dec-16U.S. indices mostly advanced on Friday, December 2 2016. Dow Jones Industrial Average was the only one that declined.

For the week, Dow Jones Industrial Average and Dow Transportation Average logged a win by +0.1%. S&P 500 lost -1.0%, NASDAQ Composite -2.7% and Russell 2000 by -2.4%. Over the past five days, both Dow averages were up three day sand down two. S&P 500 and NASDAQ were down three days and up two. Russell 200 was down four days.

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