Morning Notes – Wednesday September 28, 2016

Directional Bias For The Day:

S&P 500 eMini Futures 28-Sep-16 8:30 AM

  • The futures are unchanged but down from European session high of 2158.00
  • Third to last trading day in September is 61.9% bullish for S&P 500 – up three out of last six years
  • Odds are for an up day
  • Key levels for eMini futures: break above 2158, 4:00 AM high, for bulls and break below 2147, 9:00 PM low, for bears
  • Markets in the East were mixed – Shanghai, Tokyo and Seoul were down but Sydney, Mumbai and Hong Kong were up
  • European markets are mostly up; most of them made a long tail red-candle on Tuesday, with close near the middle
  • On Tuesday, at 4:00 PM, S&P future (Dec contract) closed at 2152.50 and the index closed at 2159.93 – a spread of about 7.50 points

Key Levels:

  • Critical support levels for S&P 500 are 2156.68, 2146.80 and 2141.55
  • Critical resistance levels for S&P 500 are 2163.97, 2170.70 and 2173.75
  • Pre-NYSE session open, futures price action mixed; at 8:45 AM, S&P 500 futures were down by -0.25, Dow up by +4.00 and NASDAQ is up by +1.75

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

  • Up trend since Feb 08, 2016
  • 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
  • Uptrend remains under pressure
  • Price crossed above10-day EMA
  • Tuesday was a bullish engulfing candle
  • At the lower limit of Monday’s gap-down open
  • Price knocking on the lower bound of the rectangle trading range that was once broken on September 9
2-Hour (e-mini future)
  • 8:00 AM candle on September 27 was a Wyckoff Spring
  • Sequence of Higher high and higher lows since 10:00 PM on September 22 not broken but remains in danger of breaking; critical level 2131.50
30-Minute (e-mini future)
  • 4:00 AM high faced a resistance level
  • Attempting to make higher high and higher low since the double bottom of 9:00 AM September 27

Before NYSE Session Open

S&P 500 27-Sep-16Tuesday was almost a mirror opposite of Monday. Major U.S. indices erased a large chunk of Monday’s loss and formed a bullish engulfing candlestick pattern.

The index ETFs, SPY, DIA, QQQ and IWM show the bullish engulfing pattern more clearly. However, now they are at the lower limit of the gap down open of Monday, which may act as a resistance.


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