Morning Notes – Monday November 28, 2016

Directional Bias For The Day:

S&P 500 (2-hourly) 28-Nov-16 8:30 AM

  • The futures are lower and finding resistance at 2207 level
  • Moving up after making a low of 2199.50 at 3:30 AM
  • Odds are for a down to sideway day within a narrow range

Markets Around The World

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

Key Levels:

  • Critical support levels for S&P 500 are 2209.00, 2206.27, and 2200.67
  • Critical resistance levels for S&P 500 are 2215.71, 2222.79, and 2230.00
  • Key levels for eMini futures: break above 2207.25, high at 7:30 AM, and break below 2203.00, the low of 6:30 AM


  • Pre-NYSE session open, futures price action is to the downside – at 9:00 AM, S&P 500 futures were down by -5.75, Dow down by -54.00 and NASDAQ by -7.25
  • On Friday, at 1:00 PM, S&P future (Dec contract) closed at 2211.25 and the index closed at 2213.35 – a spread of about 2.25 points; futures closed at 2211.25 for the day

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

  • Up trend since Feb 08, 2016
  • Uptrend resumed; broken above a downtrend line since August 15 high
  • 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 the low on June 27, 2016
  • Broke below a small bearish ABCD pattern with a downside target near 2105.30 (100% – met), 2076.77 (138.2% – came close), 2067.96 (150%), 2059.14 (161.8%)
  • Moved above 2193.81, which nullified the break below 2015 high made in early November
  • Above 39-week SMA and 89-week SMA
  • Above 100-day, 200-day, 50-day and 20-day SMA
  • Down trend line broken to the upside; trend line retaken on November 21
  • Sequence of higher highs and higher lows
  • Broken above the August high of 2193.81, the then all time
2-Hour (e-mini future)
  • Drifting up after breaking above the upper limit of an ascending triangle
  • Broken above a resistance zone – 2180-to-2185; which was also the upper limit of an ascending triangle; target near 2212; high reached on Friday was 2211.75
  • Broke a symmetrical triangle to the upside at 2:00 PM on November 15; reached the target near 2198 – 2200
  • At 20-bar EMA which is above 50-bar EMA
30-Minute (e-mini future)
  • In a range since 6:00 PM on Sunday, November 27
  • At 20-bar and 50-bar EMA

Previous Session

S&P 500 25-Nov-16 FriMajor U.S. indices advanced on the shortened trading day following Thanksgiving holiday.

In 14 trading days since November 7, Dow Jones Industrial Average and Dow Jones Transportation Average have declined only twice and S&P 500 and NASDAQ Composite have declined only four times.

Russell 2000 extended its winning streak to 15. Since 1987, it did that two times before Friday. Only once the streak was extended to 16 days, which went on to 21 days – in March 1988. Since October 27, Dow Transportation Average has had only three losing days and 18 positive days.

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