Morning Notes – Friday February 3, 2017

Directional Bias For The Day:

  • The futures are higher
  • Jumped up following NFP report
  • Trending up after making a triple bottom near 2264.50 at 1:00 AM on February 2
  • Odds are for an up day; watch for break below 2277.00 for change of fortunes

Markets Around The World

  • Markets in the East were mixed; Shanghai and Sydney were down; Hong Kong, Tokyo, Seoul and Mumbai were up
  • European markets are higher
  • Dollar index, EUR/USD and GBP/USD are down; USD/JPY is up
  • Commodities are mostly down – only silver is up
  • 10-yrs yield is at 2.452%, down from February 2 close of of 2.470%; 30-years is at 3.078%, down from February 2 close of 3.083%

Key Levels:

  • Critical support levels for S&P 500 are 2275.14, 2271.65 and 2267.21
  • Critical resistance levels for S&P 500 are 2283.97, 2289.14 and 2300.99
  • Key levels for eMini futures: break above 2285.00, high of 9:30 AM on February 1 and break below 2277.00, the low of 5:00 AM


  • Pre-NYSE session open, futures price action is to the upside – at 9:00 AM, S&P 500 futures were up by +9.25, Dow is up by +86.00 and NASDAQ by +15.75
  • On Thursday, at 4:00 PM, S&P future (March contract) closed at 2276.25 and the index closed at 2280.85 – a spread of about 4.75 points; futures closed at 2275.50 for the day; the fair value is +0.75

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

  • Confirmed Uptrend
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2%
  • Candlestick for the last week, January 23, was a large green body following two weeks of near dojis bodies with small range within the large green body of January 2 week
  • Broke above a down-sloping flag on November 14, 2016; first target of 2285.92 is met; next target is near 2363.14
  • Last swing low, 2083.79, was the low on November 4, 2016
  • Above 39-week SMA and 89-week SMA
  • Gap down open of Monday January 30 acting as a resistance; an island is emerging a gap-up above 2289.14 or gap-down open below 2267.21will complete it
  • A red candle after a gap-up open
  • The emerging broadening pattern since December 12, is getting nullified, a break below 2233.62 will resuscitate it
  • Above 100-day, 200-day, 50-day, and 20-day SMA/EMA
  • Sequence of higher highs and higher lows
  • Last swing low 2263.62
2-Hour (e-mini future)
  • An emerging symmetrical triangle
  • Trending down after making a high of 2299.50 at midnight January 25-26; downtrend – lower lows, lower highs
  • Broken above the downtrend line from January 6 high, that it was hugging for many days
  • Uptrend paused
30-Minute (e-mini future)
  • At the upper limit of a horizontal channel and near the gap-down resistance; break above will pave the path for target near 2305.00 level
  • Rising above a downtrend line since 1:00 AM on January 26
  • Made a double bottom at 11:30 AM on January 31 with a breach of January 30 low
  • Broke above the intermediate high of 2277.00;  fallen back into the range; forming another channel with higher upper limit
  • Below a falling 50-bar and 20-day EMAs after rising above them

Previous Session

U.S. indices were mostly down on Thursday February 2. Only S&P 500 eked out a small gain. It is forming an island a gap-up open above2289.14 or gap-down open below 2267.21 will complete the pattern. NYSE Composite and Wilshire 5000 Total Market index are forming a pattern similar to that of S&P 500.

There is no material change in the patterns of other major indices.

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