Market Diary – Monday, June 6, 2016

9:50 AM: Breaking Out

ES_30_16066_2The impact of evening star didn’t last long and the futures are breaking above a rectangle trading box and also an ascending triangle. S&P 500 is near 2108, which increase the probability of it testing the resistance of 2111.05, the high reached in April 2016, and 2116.48, the high reached in November 2015.

9:25 AM: Evening Star

ES_30_16066_1With the NYSE nearing open, S&P 500 futures are forming an evening star, a three candlestick pattern, on 30-minute timeframe. The pattern is still bounded by an uptrend line, limiting its potential.

Directional Bias For The Day:

  • The bias is to the upside; but S&P 500 futures are near a resistance level
  • Critical resistance level for S&P 500 is 2116.48
  • Chair Yellen is giving a speech at 12:15 PM and it will have impact

Before NYSE Session Open

Asian Session

The Asian bourses were mixed after the weekend.

  • Shanghai Composite was down by -0.16%; it is facing a resistance and 50-day SMA but still maintaining an upward bias, at least in the short-term; Hang Seng gained +0.40%
  • Nikkei 225 shed -0.37% but for the day it was up as it opened the day with a deep gap-down. After that it rose through out the day. If Nikkei follows through on Tuesday the it might be a short-term reversal
  • Sydney’s S&P/ASX 200 gained +0.78%; it continues its bounce off the lower-limit of a rectangle that we mentioned on June 2nd
  • Sensex was lost -0.24%; with this, it has formed en evening star 3-day candlestick reversal pattern; still, there is support at 26561, the low reached on May 31st

European Session

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

  • DAX is up by +0.24%; so far it is forming a green Harami candlestick buried within a large red candle of Friday; STOXX 600 is up by +0.23% and its candlestick formation is similar – more like a morning star
  • FTSE-100 is up by +1.08%; it formed a bullish engulfing pattern on Friday
  • CAC-40 up by +0.17%;  Italian FTSE MIB is up by +0.18%; Spanish IBEX-35 is up by +0.38% and Swiss SMI-SWX Is up by +0.28%; they all are forming a similar candle similar to that of DAX for the last two days

Currencies

  • U.S. Dollar index is marginally up for the day so far; it is still showing a downward bias, which accentuated after big-loss on Friday; it is inching toward the support of 92.52, the lower bound of rectangle box, which is forming at the top since January 2015. The high of the has is near 100.
  • Euro is down against the dollar; it is showing a similar pattern that of dollar but in reverse, which could turn out to be a bottoming pattern if it breaks above 1.16163, the high reached on May 3, 2016.
  • USD/JPY is slightly up (Yen is weaker) but it looks more like a dead-cat-bounce; the trend is still down
  • Pound is weaker; against euro, it is in an upswing since November 2015, however, the volatility has increased since the start of 2016
  • Aussie and Kiwi dollars are down for the day; they are bouncing off the bottom formed in August 2015 at the lowest level is previous six years; the emerging chart pattern also has a potential to become a bearish flag
  • MSCI Emerging Markets Currency Index rose by +0.7%; Indonesia’s rupiah climbed 1.6 percent, and Malaysia’s ringgit strengthened 1.2 percent; Indian Rupee lost against the U.S. dollar

Commodities

  • WTI Crude is up by +1.04 to 49.65, still trying to break 50; the short-term trend is up
  • Natural Gas is slightly up by +0.41 to 2.439, nearing the resistance of 2.480, the January 8th high
  • Gold and Silver are up marginally, following a large range day on Friday
  • Copper is up by +0.160 to 2.129; Friday was the largest range day since May 5, 2016; it has broken out of a chart pattern to the upside; there are no strong resistance levels nearby

Yields

  • Treasury yields, U.S. 30-years and 10-years, are by +0.013% and +0.021% respectively; but they broke below triangle patterns and are still facing downward pressure

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 2096.19 2095.50
R1 2107.01 61% 2108.25 56%
R2 2114.90 42% 2118.75 31%
R1 2125.72 44% 2131.50 22%
S1 2088.30 36% 2085.00 36%
S2 2077.48 34% 2072.25 26%
S3 2069.59 24% 2061.75 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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