Morning Notes – Tuesday October 18, 2016

Directional Bias For The Day:

S&P 500 eMini Futures 18-Oct-16 6:00 AM

  • The futures are up; futures making a bullish engulfing pattern on daily timeframe
  • Odds are for an up day
  • Key levels for eMini futures: break above 2135.50, the high of 4:30 AM, for bulls and break below 2128.00, the low of 11:00 PM, for bears
  • Markets in the East were mostly up
  • European markets are mostly up; most gapped up at the open and have maintained those levels
  • Dollar index is down so are EUR/USD, GBP/USD and USD/JPY
  • Commodities are mostly up
  • On Monday, at 4:00 PM, S&P future (Dec contract) closed at 2120.25 and the index closed at 2126.50 – a spread of about 6.25 points; futures closed at 2123.00 for the day

Key Levels:

  • Critical support levels for S&P 500 are 2124.43, 2114.74 and 2105.04
  • Critical resistance levels for S&P 500 are 2134.71, 2142.45 and 2149.19
  • Pre-NYSE session open, futures price action is to the upside; at 7:00 AM, S&P 500 futures were up by +10.25, Dow by +70.00 and NASDAQ by +26.00

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
  • In danger of making a small bearish ABCD pattern; a break below 2119.12 will complete it with a target near 2104 level
  • Uptrend remains under pressure; need to rise above 2179.99 to relive the pressure
  • Turning down from the previously broken down trend line after a test
  • 20-day EMA crossed below 50-day EMA on October 13
2-Hour (e-mini future)
  • Downtrend since 10:00 AM on September 22 – mostly lower lows and lower highs; advance above 2143.25 will break this sequence
  • Bounce from October 13, 8:00 AM low turned down at 2143.25 at prior support-turned-resistance level
  • Possible emergence of a right-shoulder of an inverse head-and-shoulder pattern; a break above 2143.25 will trigger it
30-Minute (e-mini future)
  • Down trend since 10:00 AM on October 14
  • Turned up in between the 61.8% and 78.6% Fibonacci retracement level of the rally from 10:00 AM October 13 low of 2107.75 to October 14 high

Before NYSE Session Open

S&P 500 17-Oct-16On Monday, major U.S. indices continued the downtrend that they had started at 10:00 AM on Friday.

The three day candlestick pattern for S&P 500 looks bearish, though, it is not a classic pattern. The first candle is a near doji wilt long lower tail. The second candle looks like a shooting star with a long upper tail.  It gapped-up at the open and made a higher high than the first candle. The third candle is a red candle, which closed below second candle’s low but did not breach the first candle’s low. The patterns is similar for other major indices except for Russell 2000, whose second candle did not make a higher high than first candle.


Print Friendly, PDF & Email