Directional Bias For The Day:

• The futures facing downward pressure
• Futures drifting down since 4:00 PM high on Monday
• Odds are for a down day; a break above 2140-2142 will change the market tone
• Futures are sideways since Asian session on Sunday (U.S. time) after falling more in the after-market trading post-NYSE close on Friday
• Futures off the lows of 2100.25 by more than ten points
• Markets in Asia were mixed and most did not follow the up-Monday in the U.S.
• European markets are mixed but most are down from open
• On Monday, at 4:00 PM, S&P future (Dec contract) closed at 2151.25 and the index closed at 2159.04 – a spread of about 8.75 points

Key Levels:

• Critical support levels for S&P 500 are 2139.05, 2131.25, and 2119.12
• Critical resistance levels for S&P 500 are 2159.04, 2169.08 and 2181.02
• Pre-NYSE session open, futures price action is to the downside; at 8:45 AM, S&P 500 futures was down by -17.50, Dow was down by -141 and NASDAQ was down by -29.75

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

Monthly	Up trend since Feb 08, 2016
Weekly:	Current uptrend under pressure Fallen below an up-trending 10-week SMA 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	Uptrend under pressure Price back at 50-day EMA after a dip below Piercing candle following a range expansion red candle 38.2% retracement from last low is 2116.59 and was not breached
2-Hour (e-mini future)	After making a high of 2156.00 during 2:00 PM candle on Monday, it is drifting down The bounce following the decline from the high of 2189.25 to 2100.25 reached 61.8% retracement
30-Minute (e-mini future)	38.2% retracement of the bounce from the lows of 2100.25 to the high of 2156.00 is 2134.70 – the low reached during European session was 2135.50 Since Monday’s 4:00 PM high, price is making a flag pattern A move above 2141-2142 will trigger the break of the flag pattern

Before NYSE Session Open

On Monday, major U.S. indices made a piercing pattern. In this pattern, a long black (red) candle is followed by a gap-down open during the next session. This session also finishes as a strong, white candle that closes more than half-way into the red candle. In a downturn, this pattern forms a reversal. Since we are not in a downturn this is not an ideal piercing candlestick pattern. However, it still has implications as a reversal pattern if on Tuesday there is a follow up.

On Monday:

	Up	Down	Last	Notes
S&P 500	+31.23 or +1.5%		2159.04	Strong piercing candle brings to 50-day EMA Recovered 58% of Friday’s loss 50% retracement from last swing low is at 2092.75
Dow Jones Industrial Average	+239.62 or +1.3%		18325.07	Recovered 61% of Friday’s loss 38.2% retracement from last swing low  is 18055.13
NASDAQ Composite	+85.98 or +1.7%		5211.89	Recovered 64% of Friday’s loss Next swing low is at 5109.80
Russell 2000	+16.66 or +1.4%		1235.87	Recovered 43% of Friday’s loss Next swing low is at 1198.73
Dow Jones Transportation Average	+103.31 or +1.3%		7925.90	Recovered 41% of its loss Next swing low is at 7804.62
VIX		-2.34 or -13.4%	15.16