Morning Notes – Tuesday March 14, 2017

Directional Bias For The Day:

  • The futures are lower;
  • Falling since 3:00 AM – European session open
  • Broke below a horizontal channel on 30-min chart; target near 2358.00
  • Odds are for a down day; watch for break above 2372.00
  • FOMC’s two day March meeting starts today; it is weighing on the market

Markets Around The World

  • Markets in the East closed mixed – Hong Kong and Tokyo were down; Shanghai, Sydney, Mumbai and Seoul were up
  • European markets are lower
  • Dollar index, USD/JPY and GBP/USD are up; EUR/USD is lower
  • Commodities are mixed – crude oil, NatGas and copper are down; gold and silver are higher
  • 10-yrs yield closed at 2.608% on March 13 up from March 10 close of 2.582%; 30-years closed at 3.192% up from 3.169%

Key Levels:

  • Critical support levels for S&P 500 are 2363.04, 2354.54 and 2352.87
  • Critical resistance levels for S&P 500 are 2376.86, 2383.89 and 2388.59
  • Key levels for eMini futures: break above 2372.00 high of 3:30 PM on March 13 and break below 2359.00, the low of 1:00 PM on March 10


  • Pre-NYSE session open, futures price action is to the downside – at 8:15 AM, S&P 500 futures were down by -8.00, Dow by -65.00 and NASDAQ is down by -15.50
  • On Monday, at 4:00 PM, S&P future (June contract) closed at 2371.00 and the index closed at 2373.47 – a spread of about +2.50 points; futures closed at 2371.25 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, Friday March 10, was a  red doji candle – small body, small upper shadow and slightly larger lower shadow
  • Did not breach the high of previous week
  • Broke a streak of six consecutive positive 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 small green doji candle with small upper and lower shadow; day’s range was contained within the range of previous day
  • Intraday range less than 1.00% since December 29;
  • Breaking out from an up-sloping channel that is n effect 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)
  • The break above of a down trend line that started on March 1 is in danger of reversing; price falling without making a single higher high; need a break above 2376.25 for that; a break below 2359.00 will resume the short term downtrend
  • General drift lower since making a high of 2301.00 at 2:00 PM on March 1
  • Uptrend is under pressure
  • At flattening 20-bar EMA and 50-bar EMA
30-Minute (e-mini future)
  • Breaking below a horizontal channel; high at 2372.00 and low near 2365.25 – target near 2358.00, which is near the low of 2359.00 on March 10
  • March 10 high was slightly above the 38.2% Fibonacci retracement level of the decline from 2401.00 on March 1 to the low of 2354.00 on March 9; the 61.8% retracement level is near 2382.25
  • Pre-NYSE open price action is range bound since 6:30 PM on March 1e
  • Above flat 20-bar EMA and 50-bar EMA

Previous Session

U.S. indices closed mixed on Monday March 13. S&P 500, NASDAQ Composite and Russell 200 closed slightly higher but Dow Jones Industrial Average and Dow Jones Transportation Average closed lower.

The day’s range was very narrow. For most of the day, S&P 500 was negative. It turned around at 1:00 PM and closed up 0.87 points.

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