Market Diary – Thursday Aug 18, 2016

Directional Bias For The Day:


  • S&P 500 futures are drifting lower after making day’s high at 3:00 AM
  • Odds are high for a sideways or a down day – break above 2182.75 will be a power-buy setup and bullish for the day
  • On the 2-hour chart, S&P future broke above a short-term trend line on Wednesday but is retracing;Critical support levels for S&P 500 are 2172.39, 2169.35, and 2158.21
  • Critical resistance levels for S&P 500 are 2186.24, 2192.51 and 2201.95
  • Pre-NYSE session open, futures price action is to the mixed; at 8:45 AM, S&P 500 future was up by +0.25, Dow was down by -9 and NASDAQ was up by +5.00
  • U.S. Job Less Claims came at 262K, better than the estimates of 269K

The trend and patterns on various time frames are:

  • Up trend since Feb 08, 2016 with one pullback; broke out of a 2-year trading range in July, 2016
  • Uptrend since June 28th with one pullback; made a hammer on Wednesday
2-Hour (e-mini future)
  • Range bound between a low of 2167.75 and a high of 2190.75;
  • bounced off the low on Wednesday and is in the middle of the range;
30-Minute (e-mini future)
  • Broke above a down-trend line (since 1:30 PM, August 15th) at 3:30 PM on August 17th;
  • now pulling back for a test of the broken trend line – 38.2% Fibonacci retracement level is 2176.25 and 50% is 2174.25

Before NYSE Session Open

SPX_D_160817_EoDMajor US indices staged a late-day rally on Wednesday after the release of minutes of July meeting of FOMC. The NYSE session started with S&P 500 future unchanged from the previous day. Market quickly declined and by 11:30 AM, S&P 500 was almost ten points below its Tuesday close. Then the turnaround started, which gained speed after the Fed minutes were release at 2:00 PM and after a quick swoon down immediately after the release.

All major indices formed hammer pattern for the day after testing a support, the low reached on August 10th. All except, the small cap, were positive for the day after being down more than -0.4% at day’s lows.

  • S&P 500 gained +4.07 or +0.2% to close at 2182.22;
  • Dow Jones Industrial Average was up by +21.92 or +0.1% to 18573.94;
  • NASDAQ Composite gained +1.55 or +0.03% to close at 5228.66;
  • Russell 2000 was down -3.45 or -0.3% to 1227.68;.

Asian Session

Asian bourses were mixed on Thursday.

  • Shanghai Composite was down by -5.44 or -0.17% to close at 3104.14;
  • Hang Seng closed up by +223.38 or +0.98% to 23023.16; it gapped up at the open but still closed at the lows of the day
  • Nikkei 225 closed down by -259.63 or -1.55% to 16486.01; it lost more than it had gained on Wednesday;
  • Sydney’s S&P/ASX 200 was down by -27.20 or -0.49% to 5507.80;
  • Sensex was up +118.07 or +0.42% to close at 28123.44;
  • South Korea’s KOSPI was up +11.72 or +0.57% to close at 2055.47;

European Session

In pre-US session, the European stock markets are mostly mixed at 8:00 AM and are fading from the highs.

  • DAX is up by +15.44 or +0.15% at 10553.11; the day is shaping up to be a red harami candle within a large red-candle of Wednesday;
  • FTSE-100 is down by -1.61 or -0.02% to 6857.54; it is completed an evening star pattern on daily charts; next support is at 6812.73 and resistance is at 7122.74
  • CAC-40 is down by -3.66 or -0.08% to 4414.02; it has closed down for the past three days;
  • Spanish IBEX is almost unchanged at -0.60 or -0.01% to 8486.40; it is below the open;
  • Italian FTSE MIB is down by -4.09 or -0.02% to 16524.27;
  • Swiss SMI-SWX is up by +5.71 or +0.07% to 8159.51;
  • STOXX-600 is up by +1.27 or +0.37% to 341.74


  • U.S. Dollar index is down by -0.255 to 94.425; it is back at the uptrend line, which is in progress on daily timeframe since May 3rd;
  • EUR/USD is up by +32.3 pips to 1.13206; on August 16th, it broke above a short-tern down trend line since May 3rd and the next resistance is 1.14242;
  • GBP/USD is up by +108.0 pips to 1.3151; it is at a resistance level; the next resistance is ay 1.3341;
  • USD/JPY is up by +15.3 pips (Yen is weaker) to 100.211; it is struggling at the support – a congestion area that lasted for more than six months in 2013


  • WTI Crude is up by +0.31 or +0.66% to 47.10; it has just cleared a resistance and broken above a down trend line since June 9th; the next resistance is at 48.25;
  • Natural Gas is up by +0.009 or +0.34% to 2.628;
  • Gold is up by +6.9 or +0.51% to 1355.70;
  • Silver is up by +0.102 or +01.52% to 19.750;
  • Copper is up by -0.0345 or +1.60% to 2.1865;


  • U.S. Treasury yields are down for the day so far
  • 30-year yield is down by -0.12 basis points to 2.2611% and 10-year is down by -0.14 basis points to 1.547%

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
Level Break
Pivot 2177.93 2175.75
R1 2187.37 60% 2186.00 56%
R2 2192.51 43% 2192.25 32%
R3 2201.95 47% 2202.50 27%
S1 2172.79 36% 2169.50 36%
S2 2163.35 34% 2159.25 26%
S3 2158.21 21% 2153.00 20%

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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