Morning Notes – Tuesday November 8, 2016

Directional Bias For The Day:

S&P 500 eMini Futures (2-Hourly) 8-Nov-16 6:40 AM

  • The futures are down
  • Odds are for a consolidation following big gains on Monday
  • Markets are waiting for results of U.S. presidential election

Markets Around The World

  • Markets in the East were mostly up – Tokyo was the only down market
  • European markets are mostly down – Switzerland being the only exception; most tried to fill the gap of November 2, which acted as a resistance
  • Dollar index, EUR/USD and GBP/USD are down; USD/JPY is up
  • Commodities are mixed – copper, crude and NatGas are down; gold and silver are up

Key Levels:

  • Critical support levels for S&P 500 are 2124.22, 2117.54, and 2100.59
  • Critical resistance levels for S&P 500 are 2133.25, 2140.58, and 2147.13
  • Key levels for eMini futures: break above 2130.25, the 4:30 AM high, and break below 2121.50, the low of 8:30 PM on November 7


  • Pre-NYSE session open, futures price action is to the down side; at 6:45 AM, S&P 500 futures were down by -4.75, Dow by -28.00 and NASDAQ by -9.25
  • On Monday, at 4:00 PM, S&P future (Dec contract) closed at 2126.50 and the index closed at 2131.52 – a spread of about 5.00 points; futures closed at 2129.00 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
  • Above an 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
  • Crossed above 39-week SMA after falling below it; above 89-week SMA
  • Large green candle – largest point change since September 9, which was down
  • Down trend – 1) broken below an uptrend line; 2) Lower high lower low; 3) turned back from the broken uptrend line on a bounce
  • Broke above November 4 high of 2099.07 marking a reversal
  • Bounced off 50-day EMA
  • Nearing the 61.8% Fibonacci retracement level of 2068.89
2-Hour (e-mini future)
  • Bouncing off from the lows and maintaining Monday’s gap up open
  • At the high of October 31, which is acting as a resistance
  • Below a downtrend line (since 10:00 AM on September 22); need to break above 2156.50 to break this downtrend line; broke the sequence of  mostly lower lows and lower highs
30-Minute (e-mini future)
  • At the high of October 31 – resistance
  • Broken above the down trend that was on since 5:00 AM October 25
  • Mostly sideways since 4:30 PM on November 7 just below the resistance zone

Previous Session

S&P 500 7-Nov-16U.S. markets sharply advance on Monday following election news that increased the odds for Hillary Clinton victory. Major indices were up by more than +2%. $VIX was down by close -17%.

S&P 500 recovered in one day what it had lost in four. It closed above the high of November 1. The next critical levels to break is 2133.25, the weekly high of the last week that ended on November 4, and 2134.72, the 2015 high.

The action of DJIA is even more bullish. It is knocking on the highs of October 14 to October 24 period. A break above it would also break the downtrend line from August 15 high.

Dow Transportation Average broke above its resistance level and opened up the path to the upside targets.

Dow Transportation Average (Weekly) 7-Nov-16

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