Morning Notes – Thursday November 3, 2016

Directional Bias For The Day:

S&P 500 eMini Futures 3-Nov-16 8:40 AM

  • The futures are up and broken above a down trend line on 30-minute timeframe
  • S&P 500 has been down for seven consecutive day; before yesterday, it had happened only twice since 2010 and the streek ended at seven
  • Odds are for a bounce

Markets Around The World

  • Markets in the East were mostly down – Seoul was the exception and Japan was closed
  • European markets are mostly up after opening with a gap-down – Switzerland is the only exception
  • Dollar index and EUR/USD are down; USD/JPY  and GBP/USD are up
  • Commodities are mixed – Crude oil, and copper are up;  NatGas, gold and silver are down

Key Levels:

  • Critical support levels for S&P 500 are 2094.00, 2090.71, and 2083.47
  • Critical resistance levels for S&P 500 are 2105.05, 2113.12, and 2118.99
  • Key levels for eMini futures: break above 2098.75, the 7:00 AM high, for bulls and break below 2086.25, the low of 3:30 AM, for bears


  • Pre-NYSE session open, futures price action is to the up side; at 9:00 AM, S&P 500 futures were up by +4.25, Dow by +37.00 and NASDAQ by +3.75
  • On Wednesday, at 4:00 PM, S&P future (Dec contract) closed at 2092.00 and the index closed at 2097.94 – a spread of about 6.00 points; futures closed at 2092.25 for the day

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 2154.79 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
  • Broke below a small bearish ABCD pattern with a downside target near 2105.30 (100% – met), 2076.77 (138.2%), 2067.96 (150%), 2059.14 (161.8%)
  • Broken below 2015 high, which was acting as a resistance
  • Down trend – 1) broken below an uptrend line; 2) Lower high lower low; 3) turned back from the broken uptrend line on a bounce
  • Falling below the lower limit of a descending triangle
  • A break above Wednesday high of 2111.76 would mark a reversal pattern
2-Hour (e-mini future)
  • Downtrend since 10:00 AM on September 22 – mostly lower lows and lower highs; need to break above 2156.50 to break this downtrend line
  • Lower high / lower lows since 4:00 AM October 25
  • Bounced above a large red-candle of 10:00 PM on November 2; a break above 2106.50 would start a reversal
30-Minute (e-mini future)
  • Down trend since 5:00 AM October 25
  • Broke above a sharper down trend line since 3:00 AM on November 1
  • Made first higher high and higher low since 11:00 PM on November 2

Previous Session

S&P 500 02-Nov-16U.S. markets continued their decline on Wednesday. Pre-session up-move in futures did not survive the first half hour of trading. Afterwards it was all downhill for most major indices.

S&P 500 and NASDAQ Composite extended their down streak to seven days. Dow Jones Industrial’s streak is at five. All, including Russell 2000 and NYSE Composite, breached Tuesday’s low.

Dow Transportation average bucked the trend. It did not fall below Tuesday’s low and closed up for the day. It still remains the best looking chart.

Dow Jones Transportation Average 02-Nov-16


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