Morning Notes – Friday September 30, 2016

Directional Bias For The Day:

S&P 500 eMini Futures 30-Sep-16 8:15 AM

  • The futures are drifting higher since 3:00 AM double bottom of 2135.75
  • Last trading day in September is bearish; it is usually up only 28.6% of times; down in last five years
  • Odds are for a down day
  • Key levels for eMini futures: break above 2153.75, September 29 2:30 PM high, for bulls and break below 2143, low of 6:30 AM, for bears
  • Markets in the East were mostly down except for for Mumbai, which gained +0.1% after declining -1.6% on Thursday
  • European markets are mostly down but sharply up from early-session low following a gap-down open; the gaps are not filled
  • On Thursday, at 4:00 PM, S&P future (Dec contract) closed at 2143.75 and the index closed at 2151.13 – a spread of about 7.50 points; futures closed at 2148.50

Key Levels:

  • Critical support levels for S&P 500 are 2145.20, 2141.55 and 2135.91
  • Critical resistance levels for S&P 500 are 2160.88, 2168.65 and 2172.67
  • Pre-NYSE session open, futures price action is mostly unchanged; at 8:30 AM, S&P 500 futures were up by 0.25, Dow down by -4.00 and NASDAQ is down by -1.50

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
  • Large red-candle that nullified Wednesday’s followed through of Tuesday’s bullish engulfing candle
  • Back below the rectangle trading range that was once broken on September 9
  • An up-sloping flag is forming; a break below 2146.33 will be bearish
  • Price crossed below 10-day EMA
2-Hour (e-mini future)
  • Sequence of Higher high and higher lows since 10:00 PM on September 22 not broken; break below 2132.75 will do it
  • At the uptrend lien from the lows of September 2
30-Minute (e-mini future)
  • Price broke below a uptrend line from lows of September 27
  • Formed a double bottom at 3:00 AM; a break above 2153.75 will complete the pattern

Before NYSE Session Open

S&P 500 29-Sep-16On Thursday, major U.S. indices declined sharply and nullified the bullish chart pattern of previous two days.

Small caps lost the most but Dow Jones Transportation Average declined the least.  Transport average is also showing the best chart pattern and is still at the upper end of recent congestion area.


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