The futures facing downward pressure – odds are high for a down trend day
ECB Policy inaction has perhaps changed the tone of the market
Markets in Asia were mostly down overnight and European stocks are down too
Futures contract changed to Dec’ 16
On Thursday, at 4:00 PM, S&P future (Dec contract) closed at 2173.00 and the index closed at 2181.30 – a spread of about 8.25 points
Key Levels:
Critical support levels for S&P 500 are 2177.49, 2173.59, and 2170.86
Critical resistance levels for S&P 500 are 2184.94, 2187.87 and 2193.17
Pre-NYSE session open, futures price action is to the downside; at 7:15 AM, S&P 500 futures was down by -6.75, Dow was down by -57 and NASDAQ was down by -12.25
Significant Event:
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The trend and patterns on various time frames for S&P 500 are:
Hugging an up-trending 10-week SMA since the week of August 22
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 at 20-day and 10-day EMAs
A rally and close above 2193.42 will nullify the abandoned baby top reversal formed on Aug 24
9-period RSI is 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)
Sequence of higher highs and higher lows broken
Uptrend line broken and acted as a resistance on bounce
Next support at 2154.75 low on September 1
30-Minute (e-mini future)
Uptrend line broken and acted as a resistance on bounce
Down pressure
Before NYSE Session Open
Thursday started on a down note following ECB President Draghi’s press conference, which dampened the mood of investors. The major U.S. indices did not recover later in the day unlike last few days. Dow Jones Transportation Average, however, gained. VIX, the S&P volatility index gained +4.*, the most since August 24.
On Thursday:
Up
Down
Last
Notes
S&P 500
-4.86 or -0.2%
2181.30
Critical resistance of 2187.94, the Aug 26 high
Critical support of 2157.09, the September 1 low
Dow Jones Industrial Average
-46.23 or -0.2%
18479.91
In the middle of a rectangle trading box (High=18668 – Low=18247)
At 10-day and 20-day EMAs
NASDAQ Composite
-24.45 or -0.5%
5259.48
Fallen back into rectangle trading box (High=5275 – Low=5197); target near 5353