Morning Notes – Wednesday November 16, 2016

Directional Bias For The Day:

S&P 500 eMini Futures (2-hourly) 16-Nov-16 6:30 AM

  • The futures are down
  • Trending down since 7:00 PM on Tuesday
  • Odds are for a down day

Markets Around The World

  • Markets in the East were mixed – Shanghai, Hong Kong and Mumbai were down; Tokyo, Sydney and Seoul were up
  • European markets are mostly down – Only Switzerland is up
  • Dollar index, EUR/USD, USD/JPY, GBP/USD are up
  • Commodities are down

Key Levels:

  • Critical support levels for S&P 500 are 2173.98, 2166.38 and 2156.08
  • Critical resistance levels for S&P 500 are 2182.30, 2187.71 and 2193.42
  • Key levels for eMini futures: break above 2178.00, the 4:30 AM high, and break below 2170.75, the low of 2:30 PM on November 15


  • Pre-NYSE session open, futures price action is to the downside – at 7:00 AM, S&P 500 futures were down by -5.25, Dow by -46.00 and NASDAQ by -15.50
  • On Tuesday, at 4:00 PM, S&P future (Dec contract) closed at 2177.50 and the index closed at 2180.39 – a spread of about 3.00 points; futures closed at 2179.25 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; recent price action may relieve the pressure for uptrend to resume; closer to uptrend resumption than reversal
  • 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
  • Above 100-day, 200-day, 50-day and 20-day SMA
  • Down trend line broken to the upside; at the broken line from below, may act as a resistance
  • Sequence of lower highs and lower lows broken but reverse sequence hasn’t started; high above 2182.30 will begin it
  • Price above EMA-10 since November 7; EMA-10 crossed above EMA-20
2-Hour (e-mini future)
  • Tested the high of 2180.50 at 2:00 AM on November 10, near the high of September 22
  • Retracing since making a high of 2185.00 at 7:00 PM on November 15
  • Broken the emerging descending triangle to the upside; which is turning into a rectangle trading box
  • At 20-bar EMA from above
30-Minute (e-mini future)
  • Broken the emerging triangle – symmetrical or almost descending – to the upside
  • Retracing after testing the high of November 10
  • About to breach the uptrend line from the low of 12:30 PM on November 14

Previous Session

S&P 500 15-Nov-16U.S. market advanced on Tuesday. NASDAQ Composite was the biggest gainer with +1.1% gain. Wilshire 5000 Total Market index advanced for the seventh day in a row. Last time it gained for seven days was on 26 Dec 2014. That streak extended to eight days. The index then declined for ten days in next 12 days.

Dow Jones Industrial Average, S&P 500 and Russell 2000 are challenging the high made in last three days. NYSE Composite, Dow Transportation Average and Wilshire 5000 made the November high on Tuesday.  NASDAQ is still below November 10 high.



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