Market Diary – Friday August 5, 2016

Directional Bias For The Day:

ES_2Hr_160805_1

  • S&P 500 future is drifting higher, maintaining a trend that started at 1:00 PM on August 2nd.
  • On 2-hour chart, S&P 500 future is rising toward the upper bound of a rectangle trading range
  • Critical support levels for S&P 500 are 2159.07, 2152.56 and 2147.58
  • Critical resistance levels for S&P 500 are 2170.20 and 2178,48
  • Early morning futures price action is slightly to the upside; at 8:00 AM, S&P 500 future was up by +3.50, Dow was up by +21.00 and NASDAQ was up by 8.50
  • U.S. Non-Farm Payroll report will come out at 8:30 AM and will strongly impact the market action; high likelihood that a good report will buoy the market

Before NYSE Session Open

INDU_D_160804_EoDMajor US indices were mixed on Thursday and traded in a narrow range and closed with little change. Most indices declined at the open then rose and then fell little bit before the close. Dow Jones Industrial Average is carving out an up-sloping flag and a break above the downtrend line will be quite bullish.

S&P 500 was almost unchanged with a rise of +0.46 points. Dow lost -2.95, NASDAQ Composite gained +6.51 or +0.1% and Russell 2000 gained +1.03 or +0.1%.

Asian Session

The Asian bourses were mixed on Friday.

  • Shanghai Composite was down by -5.73 or -0.19% to 2976.4706;
  • Hang Seng was up by +313.86 or +1.44% to 22146.09; it is has filled the gap-down created on August 3rd and is challenging 2016 high.
  • Nikkei 225 was almost unchanged with a loss of -0.44 or -0.0% to 16254.45; it closed at the low of the day
  • Sydney’s S&P/ASX 200 was up by +21.60 or +0..39% to 5497.40;
  • Sensex was up by +363.98 or +1.31% to 28078.35; it has formed a 3-day reversal pattern; a follow through on Monday will be bullish
  • South Korea’s KOSPI gained +17.91 or +0.90% to close at 2017.94; it is filling the gap down of August 3rd.

European Session

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

  • DAX is up by +17.75 or +0.17% to 10245.61; the day’s candle so far is doji, which is following a doji created on Thursday
  • FTSE-100 is up by +3.82 or +0.09% to 6745.98; Thursday was an up day and also the largest range day since July 11th
  • CAC-40 is up by +0.48% to 4366.37;
  •  Spanish IBEX is up by +0.84% to 8456.20
  • Italian FTSE MIB is up by +1.15% to 16423.11;
  • Swiss SMI-SWX is up by +0.23% to 8100.10;
  • STOXX-600 is up by +0.23% to 338.54

Currencies

  • U.S. Dollar index is down by -0.202 to 95.515;
  • EUR/USD is up by +26.6 pips to 1.11547;
  • GBP/USD is up by +44.0 pips to 1.3157;
  • USD/JPY is down by -6.1 pips (Yen is stronger) to 101.063;

Commodities

  • WTI Crude is down by -0.09 or -0.21% to 41.84;
  • Natural Gas is down by -1.16% to 2.801
  • Gold is down by -6.00 or -0.04% to 1366.80; Silver is down by -0.153 or -0.75% to 20.290
  • Copper is down by -0.41% to 2.1650

Yields

  • U.S. Treasury yields are down for the day so far
  • 30-year yield is down -0.38 basis points to 2.255% and 10-year is down by -0.39 basis points to 1.503%

Pivot Levels:

S&P 500 is below its 10-D EMA, 10-D EMA crossed below 20-D EMA and its 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 2163.84 2159.17
R1 2168.60 49% 2164.33 47%
R2 2172.96 41% 2169.42 31%
R1 2177.72 44% 2174.58 29%
S1 2159.48 45% 2154.08 46%
S2 2154.72 48% 2148.92 38%
S3 2150.36 10% 2143.83 7%

Note: The probability of a level breaking is shown above is for the current condition when the price is below 20-D EMA, 10-D EMA is below 20-D EMA and 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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