Morning Notes – Thursday December 8, 2016

/ December 8, 2016

Directional Bias For The Day:

S&P 500 eMini Futures (2-hourly) 8-Dec-16 7:15 AM

  • The futures are drifting higher after awild swing following ECB President Mario Draghi’s press-conference
  • Finding resistance at 2241.25, the high of December 7
  • Odds are for an up to sideways day
  • Watch out for break of key levels for the futures – a rectangle trading range is forming

Markets Around The World

  • Markets in the East were mostly up – only Shanghai was down by -0.2%
  • European markets are mostly up after gap-up open – Switzerland is down
  • Dollar index, GBP/USD and USD/JPY are up; EUR/USD is down
  • Commodities are mixed; WTI crude, NatGas and copper are up; gold and silver are down
  • 10-yrs yield is at 2.403, up from December 7 close of 2.347; 30-years is at 3.081% up from 3.029% on Wednesday

Key Levels:

  • Critical support levels for S&P 500 are 2232.28, 2219.64 and 2208.93
  • Critical resistance levels for S&P 500 are 2252.34, 2263.34 and 2285.04
  • Key levels for eMini futures: break above 2241.25, high at 13:30 PM on December 7, and break below 2234.75, the low of 6:00 PM on December 7

Pre-Open

  • Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up by +3.00, Dow by +28.00 and NASDAQ by +6.50
  • On Wednesday, at 4:00 PM, S&P future (Dec contract) closed at 2239.75 and the index closed at 2241.35 – a spread of about 1.50 points; futures closed at 2236.75 for the day; fair value is +3.00

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
  • Break above the high with conviction and increased volume
  • Above 100-day, 200-day, 50-day and 20-day SMA
  • Sequence of higher highs and higher lows
2-Hour (e-mini future)
  • Broke above a rectangle trading range; lower limit of 2179.00 & higher limit of 2211.75; 100% target is near 2245.00
  • Trading a narrow range since 4:00 PM on December 7
30-Minute (e-mini future)
  • Within a range since 2:00 PM on December 7 – high 2241.25 and low of 2231.25
  • At a flattening 20-bar EMA, which is above a rising 50-bar EMA

Previous Session

S&P 500 7-Dec-16U.S. indices advanced on Wednesday, December 7 2016. All major indices except NASDAQ Composite made all time highs. NASDAQ is few points off it high.

Dow Jones Transportation Average made an all time high for the first time since March 2015. By doing so it confirmed the uptrend according to Dow Theory.

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