Directional Bias For The Day:

• The futures were little changed at 8:30 AM
• The day after Labor Day has been bullish for the market with average gains of +0.5% over the last 21 years
• On Friday at 4:00 PM, S&P future (Sept contract) closed at 2178.50 and the index closed at 2179.98 – a spread of about 1.50 points

Key Levels:

• Critical support levels for S&P 500 are 2173.59, 2170.67, and 2164.07
• Critical resistance levels for S&P 500 are 2184.87, 2187.94 and 2193.30
• Pre-NYSE session open, futures price action is to the upside; at 8:15 AM, S&P 500 futures was up by +1.75, Dow was up by +19 and NASDAQ was up by +4.75

Economic Data:

Report	Current	Est.	Prev.
U.S. ISM Non-Manufacturing PMI (10 AM)	51.4	55.4	55.5

The trend and patterns on various time frames for S&P 500 are:

Monthly	Up trend since Feb 08, 2016
Weekly	Up trend since Feb 08, 2016 with one pullback; broke out of a 2-year trading range in July, 2016 Last swing low, 1991.68, was reached on June 27, 2016
Daily	Price bounced off 20-day and 10-day EMAs following few days of indecisive action A rally and close above 2193.42 will nullify the abandoned baby top reversal formed on Aug 24 9-period RSI is diverging and showing a downtrend line; for rally to continue the down trend line needs to be broken Uptrend since June 28th with one pullback; last swing low 2147.58 on Aug 2 Mostly sideways move since August 5 61.8% retracement from last low is 2116.59
2-Hour (e-mini future)	Drifting lower since 12:00 Noon high of 2182.25 on Aug 29 Sequence of lower high / lower lows since AM on Aug 23 broken in post-NFP rally on Friday A downtrend line since 10:00 AM on Aug 23 also broken on Friday Forming a pennant with high of 2183.75 reached at 10:00 AM on Friday; a rise above 2182.25 will signal a break to the upside Previous pattern – a rectangle trading range – is morphing into a broadening pattern with horizontal upper limit
30-Minute (e-mini future)	A symmetrical triangle forming (pennant in 2-hour timeframe) Mostly sideways since Friday’s close

Before NYSE Session Open

Friday’s Non-Farm Payroll report changed market’s expectation about the Fed-Fund rate increase. This turned out to be quite bullish for major U.S. indices. Small-cap, Russell 2000, was the biggest winner.

On Friday:

	Up	Down	Last	Notes
S&P 500	+9.12 or +0.4%		2179.98	Gapped up on Friday and maintained the gap Critical resistance of 2187.94, the Aug 26 high Critical support of 2147.58, the Aug 2 low
Dow Jones Industrial Average	+72.66 or +0.4%		18491.96	Crossed above 20-day and 10-day EMA Bounced off 50-day EMA on September 1
NASDAQ Composite	+22.69 or +0.4%		5227.21	Gapped up on Friday and maintained the gap Bounced off 50-day EMA
Russell 2000	+12.03 or +1.0%		1251.82	Range expansion day on Friday Bounce of 20-day EMA on September 1

Asian Session

Asian bourses were mostly up on Tuesday:

	Up	Down	Last	Notes
Shanghai Composite	+18.62 or +0.6%		3090.71	The down-sloping flag since Aug 15 broken to the upside on Tuesday Uptrend since Jan 25 2016
Hang Seng	+138.13 or +0.6%		23787.68	Gapped up on Monday above the resistance – Oct 2015 high of 23423.64 on weekly charts Tuesday was the follow-through on the gap-up
Nikkei 225	+44.35 or +0.3%		17081.98	Gapped up on Monday above the resistance of 16943.67 – upper limit of an ascending triangle on daily charts – but closed below the open Tuesday was green harami candle within the red candlestick
S&P/ASX 200		-16.00 or -0.3%	5413.60	Monday was bullish engulfing candle Still in the CD leg of bearish ABCD pattern with target near 5370 Prior support is acting as a resistance On 89-week SMA
Sensex	+445.91 or +1.6%		28978.02	Gapped-up above the resistance of July 2015 high of 26576.32 100% extension target from the breakout of a rectangle trading box is reached Next target is 161.8% extension, near 29125
Kospi Composite	+6.45 or +0.3%		2066.53	Gapped up on Monday; Tuesday was follow-through day In a uptrend on daily timeframe; last swing low 1993.00 reached on Aug 3

European Session

In pre-US session, the European stock markets are mostly to the upside at 8:30 AM.

	Up	Down	Last	Notes
DAX	+43.97 or +0.4%		10716.19	Broken above weekly downtrend line since April 2015 and with two touches Bouncing off 89-week SMA and at 50-day EMA
FTSE-100		-27.35 or -0.4%	6852.07	Crossed above 20-day EMA on Monday Bouncing off 10-week SMA
CAC-40	+9.53 or +0.2%		4541.08	Struggling to overcome the resistance created by May 31 high of 4536.86
IBEX	+26.20 or +0.3%		8959.50	Crossed above falling 200-day SMA and 39-week SMA on Friday Next resistance at 9360.20, the of a reversal day on April 27
FTSE MIB	+18.70 or +0.1%		17209.14	Above 17122.82, the high point reached after Brexit on Aug 1 Breaking out of a horizontal trading range
Swiss Market Index	+14.86 or +0.2%		8325.3	Bounced off a rising 50-day EMA and a falling 200-day SMA on Friday Making new 2016 high
STOXX 600	+0.54 or +0.2%		351.16	Bounced off a rising 50-day EMA and a falling 39-week SMA on Friday

Currencies

	Up	Down	Last	Notes
US Dollar Index		-0.229	95.615	In the middle of rectangle trading range since January 2015 on weekly charts Finding resistance at 89-week SMA and 50-day SMA
EUR/USD		-2.8 pips	1.11605	At 200-day and 50-day SMAs  Falling below the downtrend line that it broke on August 16 to the upside
GBP/USD	+45.0 pips		1.33510	At the upper limit of a symmetrical triangle at 30-year low levels Crossed above a falling 5-day SMA on September 1
USD/JPY	+0.2 pips		103.289	Struggling to stay above a falling 50-day SMA

Commodities

	Up	Down	Last	Notes
WTI Crude		-0.53 or -1.2%	43.91	At flattening 39-week SMA Off Monday’s high of 46.53
Natural Gas		-0.046 or -1.6%	2.810	Broken above an up-sloping flag on Aug 25 and is back at the downtrend line, which is acting as a support
Gold	+11.8 or +0.9%		1338.50	Bouncing off the lower line of a slight down-sloping channel
Silver	+0.339 or +1,8%		19.71	Above the lower limit of a broken descending triangle A down-sloping flag is emerging
Copper	+0.0080 or +0.4%		2.0860	At the lower limit of a symmetrical triangle – weekly charts – at the low levels since 2009

Yields

	Up	Down	Last	Notes
30-Year Treasury		-0.5 basis points	2.266%	Crossing above a falling 50-day SMA In the middle of a symmetrical triangle
10-Year Treasury	+0.3 basis points		1.599%	Below upper limit of an ascending triangle

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	2179.48		2175.33
R1	2185.37	59%	2186.42	55%
R2	2190.76	44%	2194.83	32%
R3	2196.65	46%	2205.92	27%
S1	2174.09	36%	2166.92	36%
S2	2168.20	34%	2155.83	27%
S3	2162.81	24%	2147.42	19%

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 chance comes in picture only when R1 is broken. So are the probabilities calculated for R3, S2 and S3