Market Diary – Thursday, May 26, 2016

Directional Bias For The Day:

  • Odds are higher for the market to stay in a trading range
  • A break of 2092.00 (S&P futures) to the upside may take the it to April high
  • A break below 2080.25 may put it back within the trading range in which it stayed since April 29th.
  • Watch the opening range and first hour of trading for clues

Before NYSE Session Open

7:00 AM: A Rectangle horizontal channel forming on 6-minute S&P futures

  • High 2090.75; Low 2085.25;
  • Target after breakout to the upside 2096.25
  • Target after breakdown to the downside 2079.75
  • The resistance at Tuesday high of 2092
  • Support at overnight low 2082.50 followed by Tuesday 9:00 AM low of 2080.25
  • Price is within another horizontal channel on higher 3o-minute timeframe
  • Higher highs and higher lows on 6-minute after double bottom lows of 2082.50 reached at 21:18 and 22:00 on Tuesday (NY time)

Emini Futures - 6 Min eMini Futures - 30-minute

Asian Session

The upbeat mood from New York carried over to markets in Asia and Pacific. Most of them were up for the day..

  • Shanghai Composite is forming a rectangle trading range at the lower level of its decline since April high. It could turn out to be a bottoming pattern but is too early to say so.
  • Heng Seng is similar to Shanghai Composite but in a slightly firmer
  • Nikkei 225 is still up-sloping within a flag on daily chart that has potential to turn bearish.
  • Australian S&P/ASX gained +0.28% and is continuing to break out of an inverse head-&-shoulder pattern
  • South Korean Kospi declined at the upper limit of a down-sloping flag
  • India’s Sensex followed through on its Tuesday breakout with +1.88% gain; It I sbreaking out of an uneven inverse head-&-shoulder pattern.

European Session

In pre-US session, most of the European stock markets are up.

  • DAX and CAC-40 gapped up at the open and stayed up for the morning
  • Spanish and Italian indices are struggling to keep the stay in green


  • Dollar index is down marginal but is still in an uptrend;
  • Euro gained and is making a rounding bottom on 30-minute chart, which is within a down-sloping flag on daily charts, which is within an up-sloping on weekly chart
  • British Pound gained a bit; and is in a trading range for the last couple days on 30-minute chart, which is evolving within an up-sloping flag on daily charts
  • USD./JPY declined slightly (i.e. Yen gained against dollar); still within a down-sloping flag on daily charts
  • Emerging market currencies are mixed

Treasury Yields

Yields on 30-years and 10-years treasuries are marginally down at 8:00 AM pre-NYSE open. Yesterday, yields gained but stil haven’t broken out of the current pattern, which is directionless


  • WTI Crude has broken above 50 and is still trending up
  • NatGas continues its trend down;
  • Gold and Silver are marginally up so far; both in strong downtrend
  • Copper is gaining and is breaking out of a down-sloping flag to the upside continuing with the follow up to the  bullish engulfing candlestick pattern of two days ago
  • which eclipsed a an indecisive doji of Monday


All major indices in Western Hemisphere followed up with the breakout of the bullish flag.

Pivot Levels:

S&P 500 closed above 10-D EMA. 10-EMA closed above 20-D EMA for the first time since May 10th. The 20-D EMA is trending above 50-D EMA since March 9, 2016.

S&P 500


S&P 500 Cash eMini Futures
Level Break
Level Break
Pivot 2088.07 2084.42
R1 2097.20 61% 2095.33 57%
R2 2103.87 42% 2103.42 31%
R1 2113.00 45% 2114.33 23%
S1 2081.40 35% 2076.33 35%
S2 2072.27 35% 2065.42 28%
S3 2065.60 24% 2057.33 23%

Note: The probability of a level breaking is shown above is for the condition when 1) the price closes above 10-D EMA; 2) 10-D EMA is above 20-D EMA; and 3) 20-D EMA is above 50-D EMA. R2 break probability comes in picture only when R1 is broken. So are the probabilities calculated for R3, S2 and S3

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