Market Diary – Friday, June 3, 2016

14:00 : Slightly Better Looking Inverse Head-&-Shoulder

ES_6_160603_7Albeit after very short decline.

The break above 2096.75 will complete the patterns. Neck 2095.75, head 2082.75; target near 2108.75

11:45 AM: Bouncing Off Lower Bound of Rectangle

ES_30_160603_5Potential target near 2096.50.

11:30 AM: Uneven Inverse Head-&-Shoulder

ES_6_160603_5A break above 2092.75 would be interesting.

10:52 AM: Bounce?

ES_6_160603_4S&P 500 futures made a double bottom pattern on 14-period RSI. A break above the resistance of 2091.25 will open the path to challenge 9:30 high of 2098.

At 9:36 AM, futures broke below an up-sloping bearish flag. The measured target was 2083.25 – the high of the flag pole was 2106 and the low was 2091.25; the high point of the flag was 2098 – the futures touched 2082.75 at 10:18 AM.

Panic In Bond Street

10-years yield broke a symmetrical triangle to the downside. This increases the chance of a test of 2016 lows of 1.757%. 30-years yield broke below an ascending triangle. the net support is 2.409%, the 2016 low.

TNX_D_160603_2 TYX_D_160603_2

9:15 AM: S&P 500 Still In A Rectangle Trading Box

ES_30_160603_3Despite big swoon down after the release of NFP data, S&P 500 futures are still in a rectangle trading range that it has been forming since May 26, 2016. The NFP just made the resistance level a bit harder to overcome but hasn’t soften the support for futures to fall through. At least yet.

 

9:00 AM Dollar and Abenomics (Yen) Big Losers

Big losers of very disappointing NFP data are dollar index, which broke supports and is headed to 94.00, and Abenomics as yen strengthened against dollar and is headed towards 105. The big gainers are eur and New Zealand dollar.

DX_240_160603_2 EUR_240_160603_2 NZD_240_160603_2 JPY_240_160603_2

8:45 AM: Weakening Job Scene

NFP_12Mo_160603_1 NFP_160603 HrlEarn_160603

8:30 AM: NFP Only +38K

ES_6_160603_2The forecast was for 159K. S&P 500 Futures tanked immediately. The attached 6-minute chart was at 8:34 AM. We will monitor it how it evolves within next half hour.

Directional Bias For The Day:

  • The bias is to the upside but it depends upon the NFP data
  • Watch the first half-hour of trading of S&P 500 futures after the release of NFP at 8:30 AM EST for clues
  • Critical resistance level for S&P 500 – 2116.48 on the upside and 2085.10 on the downside

7:00 AM: Flatliner

In anticipation of Non-Farm Payroll report, the S&P 500 futures are making a flat-line.

ES_6_160603_1

Before NYSE Session Open

Asian Session

The Asian bourses were generally positive with the exception of previously shining star, Sensex.

  • Shanghai Composite was up by +0.46 after breaking above a down trend line and set to challenge 3097.16 level, the highs of 2016
  • Nikkei 225 was up too by +0.48% and formed a green-Harami candle within a large red candlestick day on Thursday.
  • Sydney’s S&P/ASX 200 gained +0.76% as it tries to bounce off the lower-limit of a rectangle that we mentioned on Thursday
  • Sensex was unchanged after making high since October 2015

European Session

In pre-US session, European stock markets are mostly up.

  • DAX is up by +0.60%, so is STOXX 600, which added 0.6%; both are up since Mario Draghi’s press conference on Thursday
  • CAC-40 up by +0.56%; FTSE-100 is up by +0.96%; Italian FTSE MIB is up by +0.36%; Spanish IBEX-35 is down by -0.04% and Swiss SMI-SWX Is up by +0.29%

Commodities

  • WTI Crude is down by -0.33 to 48.84; Natural Gas is slightly up by 0.25 to 2.425, nearing the resistance of 2.480, the January 8th high
  • Gold and Silver are up marginally; they are forming a down-sloping flag; they were up at this time on Thursday but, like on Wednesday, closed the in red
  • Copper is up by 0.475 to 2.1175; making Friday the largest range day since May 5, 2016

Yields

  • U.S. 30-years yields are down by -0.042% and is at the lower bound of an ascending triangle
  •  U.S. 10-year yields are down by -0.035% after getting rejected at the upper bound of a symmetrical triangle

Yesterday:

Though on Thursday, S&P 500 first tanked and then recovered to close at the highest level since November 3, 2015.

Pivot Levels:

S&P 500 is above 10-D EMA; 10-EMA is above 20-D EMA; 20-D EMA is trending above 50-D EMA since March 9, 2016.

S&P 500 Cash eMini Futures
 Daily Level Break
Chance
Level Break
Chance
Pivot 2099.70 2098.42
R1 2110.82 61% 2110.08 57%
R2 2116.37 42% 2116.42 31%
R1 2127.49 44% 2128.08 22%
S1 2094.15 36% 2092.08 35%
S2 2083.03 34% 2080.42 27%
S3 2077.48 24% 2074.08 23%

Note: The probability of a level breaking is shown above is for the current condition when 1) the price is 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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