Morning Notes – Wednesday December 7, 2016

Sunil Sharma

8 years ago

Directional Bias For The Day:

The futures are drifting lower since 3:00 AM
Finding resistance at 2213.00
European stocks are higher after a gap-up open but are drifting down from high level
Odds are for an up to sideways day
Watch out for break of key levels for the futures

Markets Around The World

Markets in the East were mostly up – only Indian Sensex declined, by -0.6%
European markets are up after gap-up open but are drifting down from high levels
Dollar index is down; GBP/USD, USD/JPY and EUR/USD are up
Commodities are mostly up – only WTI crude is down
10-yrs yield is at 2.371, which is lower than December 6 close of 2.396; 30-years is at 3.060% down from 3.082% on Tuesday

Key Levels:

Critical support levels for S&P 500 are 2207.53, 2200.77 and 2194.09
Critical resistance levels for S&P 500 are 2213.35, 2215.94 and 2219.64
Key levels for eMini futures: break above 2211.00, high at 7:30 AM, and break below 2202.50, the low of 11:30 AM on December 6

Pre-Open

Pre-NYSE session open, futures price action is to the downside – at 8:45 AM, S&P 500 futures were down by -2.00, Dow down by -4.00 and NASDAQ by -9.50
On Tuesday, at 4:00 PM, S&P future (Dec contract) closed at 2211.25 and the index closed at 2212.23 – a spread of about 1.00 points; futures closed at 2210.00 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*	Positive day following the gap-up at the open on Monday Resistance level at November 25 high of 2213.35; 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)*	At a resistance level near 2213.00 Trading a narrow range following a 23+ points gain during the December 5 2:00 AM candle – bounded by high of 2208.75 and the low of 2198.00 Up trend since 6:00 PM on December 4; but still below November 30 high; Above 20-bar EMA which is crossed above 50-bar EMA at 4:00 PM on December 5
*30-Minute (e-mini future)*	Made a double top patterns – high 2212.00 and low of 2208.50 – target near 2205.00 Retracing after hitting the resistance near 2213.00 Broken above an ascending triangle – upper limit 2209 Below a flattening 50-bar EMA, which is below a drooping 20-bar EMA

Previous Session

U.S. indices advanced on Tuesday, December 6 2016.

Russell 2000, NYSE Composite and Wilshire 5000 Total Market Index made all time highs. Dow Jones Industrial Average closed at the highest level ever. Dow Transportation Average is at the highest point since March 2015.