Morning Notes – Friday December 2, 2016

Directional Bias For The Day:

S&P 500 eMini Futures (30-min) 02-Dec-16 8:45 AM

  • The futures are lower but rising since 4:00 AM
  • Below a downtrend line on 30-min chart
  • European stocks are drifting higher after opening with a gap down
  • Break of near term resistance level is critical for an upside move day
  • Odds are for a down to sideways day

Markets Around The World

  • Markets in the East were down
  • European markets are down but higher from early session lows
  • Dollar index, EUR/USD and USD/JPY are down; GBP/USD is up
  • Commodities are mixed – crude, gold and silver are up; NatGas and copper are down
  • 10-yrs yield is at 2.441% and 30-years at 3.080%

Key Levels:

  • Critical support levels for S&P 500 are 2186.43, 2178.55 and 2169.65
  • Critical resistance levels for S&P 500 are 2196.67, 2199.97 and 2208.87
  • Key levels for eMini futures: break above 2193.00, high at 4:00 PM on Dec 1, and break below 2186.75, the low of 8:48 AM


  • Pre-NYSE session open, futures price action is to the downside – at 9:00 AM, S&P 500 futures were down by -2.25, Dow down by -14.00 and NASDAQ by -3.00
  • On Thursday, at 4:00 PM, S&P future (Dec contract) closed at 2189.75 and the index closed at 2191.08 – a spread of about 1.25 points; futures closed at 2192.00 for the day

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

  • Up trend since Feb 08, 2016
  • Candlestick for the current week is emerging to be a harami candle, within a larger green candle
  • 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
  • Making short-term reversal pattern by breaking below the low of November 29 and Wednesday’s bearish engulfing candle
  • Support levels are: 1) 2179.99, the high point reached on September 22; and 2) 2163.85, the 38.2% Fibonacci retracement of the rally from the low of November 4.
  • Above 100-day, 200-day, 50-day and 20-day SMA
  • Sequence of higher highs and higher lows
2-Hour (e-mini future)
  • Down trend since 8:00 AM November 30 high
  • Near a support level – high point of 8:00 AM on November 18
  • Breached the lower limit of a narrower rectangle trading range; now forming a bigger rectangle trading rage
  • 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, November 25, 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)
  • Down trend since 9:00 AM on November 30; two touches to the trend line
  • Bouncing off the low of 2184.25 made at 4:00 AM, which is near a support zone – upper limit of an ascending triangle, which was broken to the upside on November 21
  • Overhanging resistance near 2190 level – prior support turned into resistance and the 50-bar EMA
  • Below a down sloping 50-bar EMA but just crossed above a declining 20-bar EMA

Previous Session

S&P 500 2-Dec-16U.S. indices were mostly down on Thursday, December 1 2016. Dow Jones Industrial Average and Dow Transportation Average were the only indices to advance.

S&P 500 opened near the lows of Wednesday and then traded down for most of the day. The support for it seems to be 2179.99, the high point reached on September 22 and 2163.85, the 38.2% Fibonacci retracement of the rally from the low of November 4.

NASDAQ Composite has already retraced by more than 38.% Fibonacci level. The next level, 61.8%, is at 5175.54.

Print Friendly, PDF & Email