Morning Notes – Tuesday October 4, 2016

Directional Bias For The Day:

S&P 500 eMini Futures - 4-Oct-16 6:30 AM

  • The futures are unchanged but down five points from 5:00 Am high of 2159.75
  • Odds are for a sideways-to-down day
  • Key levels for eMini futures: break above 2159.75, 5:00 AM high, for bulls and break below 2150.00, low of 3:30 PM Monday, for bears
  • Markets in the East were mostly up; Shanghai is closed for the week
  • European markets are mostly up
  • On Monday, at 4:00 PM, S&P future (Dec contract) closed at 2153.50 and the index closed at 2161.20 – a spread of about 7.75 points; futures closed at 2153.25 for the day

Key Levels:

  • Critical support levels for S&P 500 are 2154.77, 2145.20 and 2141.55
  • Critical resistance levels for S&P 500 are 2164.41, 2172.92 and 2179.77
  • Pre-NYSE session open, futures price action is mostly unchanged; at 8:45 AM, S&P 500 futures were up by +0.75, Dow by 10.00 and NASDAQ is up by +6.00

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

  • Up trend since Feb 08, 2016
  • Current uptrend under pressure
  • 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
  • Small red harami candlestick within Friday’s large green candle
  • An up-sloping flag is forming; a break below 2145.20 will be bearish
  • Price above 10-day EMA
2-Hour (e-mini future)
  • An ascending triangle is being formed since September 8 gap down
  • A symmetrical triangle being within the ascending triangle since September 22
  • Sequence of Higher high and higher lows since 10:00 PM on September 22 not broken; break below 2135.75 will do it
  • At the uptrend line 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 03-Oct-16On Monday, major U.S. indices were down and made a red-harami candlestick within a larger green candle of Friday.

Dow Jones Transportation Average advanced by +-.3%. It is breaking above a resistance level. It also does better in October than other indices. NASDAQ Composite is also above a rectangle trading range that it broke above on Friday.


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