Morning Notes – Tuesday September 20, 2016

Directional Bias For The Day:

S&P 500 eMini Future - 20-Sep-16 - 8:00 AM

  • The futures are up since NYSE session close on Monday
  • Tuesday after September expiry Friday is bearish for S&P 500 – 73% odds for a down day
  • Key levels for eMini futures: break above 2146.75 for bulls and break below 2135.50 for bears
  • Markets in the East were mostly down with only Australia and South Korea being up; China, Japan, Hong Kong and India were down
  • European markets are up following through to the up Monday, which also gapped-up at the open
  • On Monday, at 4:00 PM, S&P future (Dec contract) closed at 2131.25 and the index closed at 2139.12 – a spread of about 8.75 points

Key Levels:

  • Critical support levels for S&P 500 are 2138.28, 2135.91 and 2131.20
  • Critical resistance levels for S&P 500 are 2146.45, 2153.61 and 2157.57
  • Pre-NYSE session open, futures price action is to the up side; at 8:30 AM, S&P 500 futures was up by +7.50, Dow was up by +56.00 and NASDAQ was up by +17.25

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 remains under pressure
  • Gave up 14 points gain to close by -0.4 points
  • End of day was weak
  • Not surprising for the Monday following September expiry Friday
  • 38.2% retracement from last low is 2116.59 and is  not breached
2-Hour (e-mini future)
  • On Monday afternoon, price fell back in the symmetrical triangle that it broke above in the morning; making another attempt to break out of it
  • Broke the sequence of lower highs / lower lows since September 12 but it hasn’t turned into a uptrend
30-Minute (e-mini future)
  • Steady rise after Monday afternoon decline but still below the high reached on Monday

Before NYSE Session Open

S&P 500 - 19-Sep-16Monday was an up and down day. The promising start fizzled in the afternoon and then turned into red-ink. Mid-afternoon mini-rally didn’t hold till the end.

Major U.S indices were mixed. Big cap lost ground but small-cap advanced. S&P500 and Dow Jones Industrial Averages declined -0.4 and -3.63 respectively. NASDAQ lost -9.54 or -0.2% but Russell 2000 gained +7.75 or +0.6% and Dow Transportation Average gained +22.05 or -0.3%.

 

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