Morning Notes – Thursday February 9, 2017

Directional Bias For The Day:

  • The futures are higher
  • Trying to break above a horizontal channel emerging since 9:30 AM on February 3
  • If break successful then the target is near 2307.00
  • Odds are for an up day; watch for break below 2287.75 for change of fortunes

Markets Around The World

  • Markets in the East were mostly higher – only Tokyo was down
  • European markets are higher
  • Dollar index and USD/JPY are higher; EUR/USD and GBP/USD are down
  • Commodities are higher
  • 10-yrs yield is at 2.351%, down from February 7 close of of 2.389%; 30-years is at 2.961%, down from February 7 close of 3.019%

Key Levels:

  • Critical support levels for S&P 500 are 2285.38, 2279.25 and 2271.65
  • Critical resistance levels for S&P 500 are 2299.40, 2302.52 and 2309.12
  • Key levels for eMini futures: break above 2296.25, high of 6:00 AM and break below 2287.75, the low of 8:30 PM on February 8


  • Pre-NYSE session open, futures price action is to the upside – at 6:45 AM, S&P 500 futures were up +5.25, Dow is up by +39.00 and NASDAQ by +9.50
  • On Wednesday, at 4:00 PM, S&P future (March contract) closed at 2290.50 and the index closed at 2294.67 – a spread of about 4.00 points; futures closed at 2290.25 for the day; the fair value is +0.25

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 30, was a green candle following a large green body, which followed 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
  • Another small body candle within the larger green candle of February 3
  • Intraday range less than 1.00% since December 29
  • Still maintaining the island chart pattern
  • 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)
  • Emerging descending triangle morphed into a horizontal channel; price is trying to cross above the upper bound of the channel; target near 2309.00
  • Trending higher since 10:00 AM on January 31 but not crossed above the high of 2299.50 made at midnight January 25-26;
  • Broken above the downtrend line from January 6 high, that it was hugging for many days
  • Uptrend paused – moving sideways
30-Minute (e-mini future)
  • Trying to break above a horizontal channel that is emerging since 8:30 AM on February 3; three touches to the upper bound and three to the lower bound; target near 2307.00
  • Just above a flattening 50-bar EMA and 20-day EMA

Previous Session

U.S. indices closed mostly higher on Wednesday February 8. Only Russell 2000 and Dow Jones Industrial Average were down for the day.

The day’s action was within a narrow range. The S&P 500 has not moved for more than 1.00% intraday since December 29. For the last three days the S&P 500’s real body was within the large green candle of February 3, but the body of February 8 was larger than that of last two days.

The chart pattern on daily timeframe did not change materially for indices. NYSE Composite filled the gap-up open of February 3, but it closed higher for the day.

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