Market Remarks

Market Diary – Wednesday Aug 31, 2016

Sunil Sharma

Directional Bias For The Day:

  • The futures are directionless
  • S&P future are fluctuating between 2175.75 and 2172.50 since 3:30 PM on Aug 30
  • For the past few days, at NYSE open, the futures were slightly changed and the day’s trading swung both ways with final close modestly changed from previous one
  • Only one trend day (up) in the past four trading days – three down days of less than -4.3 points and one up day of +11 points
  • On Tuesday at 4:00 PM, S&P future (Sept contract) closed at 2175.00 and the index closed at 2176.12 – a spread of about 0.75 points

Key Levels:

  • Critical support levels for S&P 500 are 2170.72, 2164.41, and 2160.39
  • Critical resistance levels for S&P 500 are 2177.49, 2183.48 and 2187.94
  • Pre-NYSE session open, futures price action is sideways; at 8:30 AM, S&P 500 future was down by -1.00, Dow was down by -13 and NASDAQ was down by -3.25

Economic Data:

Report Current Est. Prev.
U.S. ADP Non-Farm Employment Change 177K 174K 179K
U.S. Chicago PMI (9:45 AM) 51.5  54.1 55.8
  U.S. Pending Home Sales (10:00 AM)  1.3%  0.7% -0.8% 
 

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

Monthly
  • Up trend since Feb 08, 2016
Weekly
  • Up trend since Feb 08, 2016 with one pullback; broke out of a 2-year trading range in July, 2016
Daily
  • Tuesday was a red harami candlestick indicating indecision
  • A rally above and close above 2193.42 will nullify the abandoned baby top reversal formed on Aug 24
  • 9-period RSI is diverging and showing a downtrend line; for rally to continue the down trend line needs to be broken
  • Uptrend since June 28th with one pullback; last swing low 2147.58 on Aug 2
  • Mostly sideways move since August 5
  • 61.8% retracement from last low is 2116.59
2-Hour (e-mini future)
  • Drifting lower since 12:00 Noon high of 2182.25 on Aug 29
  • Still in downtrend – lower high, lower lows since 10:; AM on Aug 23; will break if future rise above 2186.75
  • Uptrend line from Aug 2 low was broken on Aug 24; it is acting as a resistance on the bounce
  • A downtrend line since 10:00 AM on Aug 23; a rise to 2185.00 will break it
  • Last pattern – a symmetrical triangle – failed on Aug 24
  • Emerging double top pattern did not last as the price rose above the low of 2165.50 between the two highs of 2190.75 and 2191.50
  • Previous pattern – a rectangle trading range – is morphing into a broadening pattern with horizontal upper limit
30-Minute (e-mini future)
  • Uptrend since 2:30 PM Aug 26 – higher lows, higher highs; though under a downtrend line with two touches since 10:00 AM on Aug 23
  • Emerging pattern – a down-sloping flag – of Tuesday broke to the down side during 10:00 AM bar
  • Within an ascending triangle since 2:00 PM low of Aug 30 with high of 2176.50

Before NYSE Session Open

Major U.S. indices were mixed on Tuesday. The best showing was by Dow Jones Transportation Average, which rose by +49.82 or +0.6%. Unlike, Dow Jones Industrial Average, it has not made a new high since November 2014. S&P 500, Dow Jones Industrial Average and NASDAQ Composite made harami candlestick pattern indicating indecision.

On Tuesday:

Up Down Last Notes
S&P 500   -4.26 or -0.2%  2176.12
  • Critical resistance of 2187.94, the Aug 26 high
Dow Jones Industrial Average    -48.69 or -0.3% 18454.30
  • At 50-day EMA
NASDAQ Composite   -9.34 or -0.2% 5222.99
  • Just above 50-day EMA
Russell 2000 +1.09 or +0.1%   1246.03

Still Asian Session

Asian bourses were mixed on Wednesday:

Up Down Last Notes
Shanghai Composite  +10.81 or +0.4%   3085.49
  • A down-sloping flag is in progress since Aug 15, which was 2016  high
  • 50-day EMA crosses above 200-day SMA
Hang Seng   -39.23 or -0.2%  22976.88
  • Next resistance – 2016 high of 23193.90
Nikkei 225  +162.04 or +1.0%   16887.40
  • At a resistance level – upper limit of an ascending triangle on daily charts
S&P/ASX 200   -45.30 or -0.8%  5433.00
  • Broken below critical support of 5465.70 forming an ABCD pattern with target near 5370 level
Sensex  +109.16 or +0.4%   28452.17
  • Follow through on the break of the resistance of the upper limit of a rectangle trading box in progress since Jul 12; target near 28950
Kospi Composite   -5.09 or -0.2%  2034.65
  • Still in a uptrend on daily timeframe; last swing low 1993.00 reached on Aug 3

European Session

In pre-US session, the European stock markets are mixed at 8:30 AM.

Up Down Last Notes
DAX   -26.09 or -0.2%  10631.55
  • Broken above weekly downtrend line since April 2015 and with two touches
  • At 89-week SMA
FTSE-100  -0.74 or -0.0% 6820.06
  •  At 20-day EMA
CAC-40  +20.74 or +0.5%   4478.23
IBEX  +74.80 or +0.8%   8760.20
FTSE MIB +115.74 or +0.7%   17008.27
Swiss Market Index   -7.41 or -0.1%  8228.60
STOXX 600 +0.65 or +0.2%   345.40

Currencies

Up Down Last Notes
US Dollar Index  +0.179   96.220
  • Resistance at 96.465
EUR/USD   -1.0 pips  1.11243
GBP/USD   -51 pips  1.30950
USD/JPY +5.0 pips   103.472

Commodities

Up Down Last Notes
WTI Crude    -0.45 or -1.0% 45.90
Natural Gas  +0.011 or +0.4%   2.838
Gold   -7.8 or -0.6%  1309.90
Silver +0.013 or +0,1%    18.59
Copper -0.0010 or -0.0%  2.0680

Yields

Up Down Last Notes
30-Year Treasury +1.2 basis points   2.246%
10-Year Treasury +0.5 basis points   1.575%

Pivot Levels:

S&P 500 rose above its 10-D EMA, 10-D EMA is above 20-D EMA and its 20-D EMA is trending above 50-D EMA since March 9, 2016.

S&P 500 Cash eMini Futures
 Daily Level Break
Chance		 Level Break
Chance
Pivot 2176.27 2175.08
R1 2182.12 59% 2181.67 55%
R2 2188.13 43% 2188.08 32%
R3 2193.98 46% 2194.67 27%
S1 2170.26 36% 2168.67 36%
S2 2164.41 34% 2162.08 27%
S3 2158.40 24% 2155.67 19%

Note: The probability of a level breaking is shown above is for the current condition when the price is above 20-D EMA, 10-D EMA is above 20-D EMA and 20-D EMA is above 50-D EMA. R2 break chance comes in picture only when R1 is broken. So are the probabilities calculated for R3, S2 and S3

Exit mobile version