Morning Notes – Thursday February 16, 2017

Directional Bias For The Day:

  • The futures are lower
  • Drifting down in a narrow range since 4:30 PM on February 15
  • Odds are for a sideways to a down day; watch for the break above 2351.50 or below 2338.75 for change of fortunes

Markets Around The World

  • Markets in the East were mixed – Tokyo and Seoul were down; Shanghai, Hong Kong, Sydney and Mumbai closed higher
  • European markets are mostly lower – only Italy is higher
  • Dollar index and USD/JPY are down, EUR/USD and GBP/USD are up
  • Commodities are mostly higher – copper is down and NatGas is unchanged
  • 10-yrs yield is at 2.470% down from February 15 close of 2.502%; 30-years is at 3.000%, down from February 15 close of 3.091%

Key Levels:

  • Critical support levels for S&P 500 are 2339.38, 2333.47 and 2322.17
  • Critical resistance levels for S&P 500 are 2355.43, 2361.61 and 2371.92
  • Key levels for eMini futures: break above 2351.50, high of 4:30 PM on February 15 and break below 2338.75, the high of 11:00 AM on February 15


  • Pre-NYSE session open, futures price action is to the downside – at 8:30 AM, S&P 500 futures were down by -4.75, Dow  by -38.00 and NASDAQ by -4.25
  • On Wednesday, at 4:00 PM, S&P future (March contract) closed at 2346.75 and the index closed at 2349.25 – a spread of about 2.50 points; futures closed at 2350.50 for the day; the fair value is -3.75

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, February 10, was a green candle, larger than previous week; for the week, the index gained +0.8%
  • Up for three weeks
  • 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 relatively large green candle
  • Intraday range less than 1.00% since December 29
  • Drifting higher within an up-sloping channel since December 27
  • 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)
  • Early session price action quite similar to that on Wednesday, Tuesday and Monday
  • Price targets of broken horizontal channel achieved
  • Uptrend confirmed
30-Minute (e-mini future)
  • Confirmed uptrend
  • Early session chart pattern look similar to that on Wednesday, Tuesday and Monday
  • Drifting slightly down after making a high at 4:40 PM on February 15
  • At or below flattening 20-bar EMA but above rising 50-day EMA

Previous Session

U.S. indices closed higher on Wednesday February 15. All major indices made all time highs.

S&P 500 has been up for seven consecutive days. It is up ten out of past eleven days. Dow Jones Industrial Average ahs been up for five days, NASDAQ Composite for seven and Russell 2000 for five.

The intra-day price movement of S&P 500 was still less 1.00%. It continues to drift up in a narrow up-sloping channel since December 27. NASDAQ Composite is also moving up in a up-sloping channel since October 28. The height of the slop has narrowed since December 28.

Dow Transportation Average and Russell 2000 broke above their respective horizontal channels.

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