Morning Notes – Wednesday October 5, 2016

Directional Bias For The Day:

S&P 500 eMini Futures 30-Min 5-Oct-16 8:30 AM

  • The futures are moving up since 6:00 AM
  • 2.75 points above 3:30 AM high of 2147.25 points and up 8.50 points above 2:00 AM low of 2141.50
  • Odds are for an up day
  • Key levels for eMini futures: break below 2143.00 for bears and break above 2158.25 for bulls
  • Markets in the East were mixed; Hong Kong and Tokyo were up, Mumbai, Sydney and Seoul were down; Shanghai is closed for the week
  • European markets are mostly down following gap-down at the open
  • On Tuesday, at 4:00 PM, S&P future (Dec contract) closed at 2143.50 and the index closed at 2150.49 – a spread of about 7.00 points; futures closed at 2144.75 for the day

Key Levels:

  • Critical support levels for S&P 500 are 2144.03, 2139.57 and 2131.20
  • Critical resistance levels for S&P 500 are 2158.89, 2165.46 and 2175.30
  • Pre-NYSE session open, futures price action is to the upside; at 8:45 AM, S&P 500 futures were up by +5.25, Dow by +44.00 and NASDAQ is up by +9.25

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
  • Tuesday formed a large red candle following a Monday’s 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 crossed below 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
  • Hugging since 12:00 Noon October 4 the uptrend line from the lows of September 2
30-Minute (e-mini future)
  • Down trend since September 30 3:00 PM high of 2168.25
  • Making higher highs since October 4 2:30 PM low of 2136.00

Before NYSE Session Open

S&P 500 4-Oct-16On Tuesday, major U.S. indices were down from the start and closed 0.2%-to-0.5% below Monday’s close. S&P 500 erased all that it gained on Friday. All breached the Monday low.

Dow Jones Transportation Average faced resistance at April high of 8149.00. It formed a red candle with a large top-tail, which, though, does not resemble shooting star. The price remains above a broken ascending triangle.

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