Morning Notes – Friday December 9, 2016

/ December 9, 2016

Directional Bias For The Day:

S&P 500 eMini Futures (2-hourly) 9-Dec-16 7:00 AM

  • The futures are drifting higher or flat
  • Futures breaking above a symmetrical triangle on 6-minute chart; resistance at 2251.50
  • Odds are for an up to sideways day
  • Watch out for price to fall within the broken triangle

Markets Around The World

  • Markets in the East were mostly up – only Hong Kong and Seoul were down
  • European markets are mostly up – only Italy is down
  • Dollar index and USD/JPY are up; EUR/USD and GBP/USD are down
  • Commodities are mixed; WTI crude, NatGas and copper are up; gold and silver are down
  • 10-yrs yield is at 2.387, up from December 7 close of 2.347; 30-years is at 3.085% up from 3.029% on December 7

Key Levels:

  • Critical support levels for S&P 500 are 2237.57, 2231.03 and 2224.49
  • Critical resistance levels for S&P 500 are 2251.69, 2259.27 and 2266.85
  • Key levels for eMini futures: break above 2250.25, high at 12:45 PM on December 8, and break below 2246.00, the low of 5:45 AM

Pre-Open

  • Pre-NYSE session open, futures price action is to the upside – at 7:15 AM, S&P 500 futures were up by +0.75, Dow by +24.00 and NASDAQ by +5.50
  • On Wednesday, at 4:00 PM, S&P future (Dec contract) closed at 2245.50 and the index closed at 2246.19 – a spread of about 0.75 points; futures closed at 2247.75 for the day; the fair value is -2.25

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
  • Followed through on the large increase on Wednesday
  • Volume lower than on Wednesday but still 73% higher than 10-day average
  • Above 100-day, 200-day, 50-day and 20-day SMA
  • Sequence of higher highs and higher lows
2-Hour (e-mini future)
  • Price reached the target of last broken rectangle trading range; lower limit of 2179.00 & higher limit of 2211.75; 100% target is near 2245.00; Next target near 2260
  • Trading a narrow range since 6:00 PM on December 8
30-Minute (e-mini future)
  • Within a range since 6:00 PM on December 8 – high 2248.25 and low of 2245.00
  • Bouncing off a flattening 50-bar EMA; just crossed over a drooping 20-day EMA

Previous Session

S&P 500 8-Dec-16U.S. indices advanced on Thursday, December 8 2016. All major indices including NASDAQ Composite made all time highs. Still $VIX was up for the last two days.

Dow Jones Transportation Average extended its winning streak to seven days. It has been down only fine time in the last 30 trading days since October 27.

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