Morning Notes – Friday October 7, 2016

Directional Bias For The Day:

S&P 500 eMini Futures 7-Oct-16 6:30 AM GBP/USD 6-Min 7-Oct-16 7:00 AM
  • The futures are down after making a high of 2157.25 at 4:00 PM on October 6
  • Non-Farm Payroll report will come out at 8:30 AM and will have an impact on the market
  • British pound’s flash crash on October evening is hanging on the market
  • Odds are for a volatile day with pressure to decline
  • Key levels for eMini futures: break below 2143.00 for bears and break above 2157.5 for bulls
  • Markets in the East were down
  • European markets are mostly down
  • On Thursday, at 4:00 PM, S&P future (Dec contract) closed at 2154.50 and the index closed at 2160.77 – a spread of about 6.25 points; futures closed at 2156.50 for the day

Key Levels:

  • Critical support levels for S&P 500 are 2150.28, 2144.01 and 2141.55
  • Critical resistance levels for S&P 500 are 2163.95, 2167.77 and 2175.30
  • Pre-NYSE session open, futures price action is to the downside; at 7:00 AM, S&P 500 futures were down by -6.00, Dow by -37.00 and NASDAQ is down by -12.75

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

  • Up trend since Feb 08, 2016
  • Current uptrend under pressure; need to rise above 2187.87 to relieve the 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; need to rise above 2179.99 to relive the pressure
  • An up-sloping flag is morphing into a symmetrical triangle; a break below 2144.01 will be bearish
  • Price is above 10-day EMA, which is below 20-day EMA since September 9
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; broke below it on October 4; now above it
30-Minute (e-mini future)
  • Broken above the down trend – from September 30 3:00 PM high of 2168.25 – at 10:00 AM on October 5; its test on October 6 withstood the onslaught
  • Sequence of higher highs since October 4 2:30 PM low of 2136.00 is in danger of breaking if it breaks below 2143.25
  • Broken below the uptrend line since October 4 3:00 PM low and could not regain it on a bounce

Before NYSE Session Open

S&P 500 6-Oct-16On Thursday, major U.S. indices opened with a small gap-down but then recovered with a reversal hammer candlestick formation at 11:00 AM. S&P 500 closed up by +1.04 and Dow Transportation Average by +0.18%. Others were slightly down for the day.

All filled October 5 gap-up open except for Transports, which turned around at the higher limit of the gap. The technical impact of two large down days – September 30 and October 4 – in the last six trading days has not dissipated yet. The volatility has increased and S&P 500 has had five down and five up days in the last ten trading days.

Print Friendly, PDF & Email