Market Diary – Tuesday August 9, 2016

Directional Bias For The Day:

ES_30Min_160809_1

  • S&P 500 future is drifting higher, high probability for a positive day
  • On 30-minute, S&P 500 future is carving out a rounding pattern; a break above 2183.00 for S&P eMini future will be bullish
  • Critical support levels for S&P 500 are 2177.85, 2173.80 and 2169.76
  • Critical resistance levels for S&P 500 are 2185.44, 2188.98 and 2192,53
  • Early morning futures price action is slightly to the upside; at 8:15 AM, S&P 500 future was up by +3.00, Dow was up by +31.00 and NASDAQ was up by +8.75

Before NYSE Session Open

NASDAQ_W_160805_EoDMajor US indices traded in a narrow range on Monday after a positive large-range Friday. S&P 500 opened the day at the high but then drifted down for most of the day before turning around at 2:00 PM. The net result was a small doji candlestick for the day at the upper end of Friday’s range. The price action was similar for other major indices too, with only Russell 2000 closing at the lower end of the range.

On Monday August 8, 2016, S&P 500 lost -1.98 or -0.1%, Dow Jones Industrial Average lost -14.24 or -0.1%, NASDAQ Composite lost -7.98 or -0.2% and Russell 2000 lost -0.88 or -0.1%.

Asian Session

Asian bourses were mixed on Tuesday.

  • Shanghai Composite was up by +21.30 or +0.71% to 3025.68; the next resistance is at 3057.42
  • Hang Seng closed down by -29.15 or -0.13% to 22466.61; the days’ action was typical of consolidation after big gains
  • Nikkei 225 was up by +114.40 or +0.69% to 16764.97; next resistance is at 16938.96
  • Sydney’s S&P/ASX 200 was up by +14.70 or +0..27% to 5552.50; the next meaningful resistance level is at 5611.20
  • Sensex was down by -97.41 or -0.35% to 28086.16; Tuesday was a bearish engulfing; next support levels are at 27970.82 and 27627.97
  • South Korea’s KOSPI gained +12.18 or +0.62% to close at 2043.76; it is breaking above a resistance level and the next two levels are at 2064.72 and 2110.81

European Session

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

  • DAX is up by +97.65 or +0.94% to 10530.01; it is trying to clear resistance level created by the upper bound of a rectangle box and a down trend line; the next resistance level is at 11430.87
  • FTSE-100 is up by +23.88 or +0.38% to 6835.01; it is continued on the reversal started on August 3rd but is at a strong resistance
  • CAC-40 is up by +0.60% to 4442.12
  • Spanish IBEX is up by +0.17% to 8577.36;
  • Italian FTSE MIB is up by +0.37% to 16805.73;
  • Swiss SMI-SWX is up by +0.32% to 8195.27;
  • STOXX-600 is up by +0.38% to 342.84

Currencies

  • U.S. Dollar index is up by +0.045 to 96.385;
  • EUR/USD is down by -9.3 pips to 1.10758;
  • GBP/USD is down by -70.0 pips to 1.2972;
  • USD/JPY is down by -22.4 pips (Yen is stronger) to 102.182;

Commodities

  • WTI Crude is up by +0.05 or +0.12% to 43.07;
  • Natural Gas is down by -1.75% to 2.700
  • Gold is down by -2.60 or -0.19% to 1338.70; Silver is down by -0.155 or -0.78% to 19.650
  • Copper is down by -0.88% to 2.1460

Yields

  • U.S. Treasury yields are mixed for the day so far
  • 30-year yield is down by -0.1 basis points to 2.298% and 10-year is up by +0.4 basis points to 1.587%

Pivot Levels:

S&P 500 is above its 10-D EMA, 10-D EMA is above 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 2181.39 2177.25
R1 2184.94 60% 2181.25 56%
R2 2188.98 43% 2187.00 32%
R1 2192.53 49% 2191.00 28%
S1 2177.35 35% 2171.50 35%
S2 2173.80 33% 2167.50 24%
S3 2169.76 23% 2161.75 23%

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