Morning Notes – Thursday March 23, 2017

/ March 23, 2017

Directional Bias For The Day:

  • The futures are higher
  • Moving sideways since 6:30 PM on March 22 – between 2349.50 and the 2343.25;
  • Daily trend is down; 30-minute chart trend is sideways;
  • Odds are for a sideways to down day; watch for break above 2349.50 and below 2343.25 for change of fortunes

Markets Around The World

  • Markets in the East closed higher
  • European markets are higher
  • Dollar index and USD/JPY are higher; GBP/USD and EUR/USD are lower;
  • Commodities are mostly higher – gold is down
  • 10-yrs yield closed at 2.396% on March 22 down from March 21 close of 2.436%; 30-years closed at 3.011% down from 3.093%

Key Levels:

  • Critical support levels for S&P 500 are 2340.51, 2336.45 and 2322.17
  • Critical resistance levels for S&P 500 are 2354.54, 2358.18 and 2366.30
  • Key levels for eMini futures: break above 2349.25, high of 2:30 PM on March 21 and high of 2356.25, the high of 12:00 PM on March 21; and break below 2343.25, the low of 7:00 AM

Pre-Open

  • Pre-NYSE session open, futures price action is to the upside – at 8:15 AM, S&P 500 futures were up by +4.00, Dow by +12.00 and NASDAQ by +5.25
  • On Wednesday, at 4:00 PM, S&P future (June contract) closed at 2345.25 and the index closed at 2348.45 – a spread of about +3.25 points; futures closed at 2342.50 for the day; the fair value is +2.75

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

Monthly
  • Confirmed Uptrend
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2%
Weekly:
  • Candlestick for the last week, Friday March 17, was a  green bullish engulfing, over a small red doji candle – small body, and relatively larger upper and lower shadows
  • Did not breach earlier high
  • An up week – seventh out of last ten weeks
  • Broke above a down-sloping flag on November 14, 2016; first target of 2285.92 and second target of 2363.14are achieved
  • Last swing low, 2083.79, was the low on November 4, 2016
  • Above 39-week SMA and 89-week SMA
Daily
  • March 22 was a small green body near the lower end of a large red candle day on March 21; bounced off the lows of February 15
  • Broke below a descending triangle with target near 2308.00;
  • Broke a sequence of higher highs and higher lows; broke below an uptrend line since November lows
  • Streak of intraday range being less than 1.00% since December 29 is broken
  • Breaking out from an up-sloping channel that is in effect since December 27
  • Above 100-day, 200-day and 50-day SMA/EMA but below 20-day EMA
  • Last swing low 2263.62
2-Hour (e-mini future)
  • Broke many support levels; bouncing off near February 15 low of 2331.25;
  • Near the resistance level 2349.50, a prior support level
  • Uptrend is under pressure
  • Below falling 20-bar EMA and 50-bar EMA
30-Minute (e-mini future)
  • Bounced off support after a sharp decline; forming a sharp rounding pattern with up sloping arc; near the resistance; forming a horizontal channel with high near 2349.50 and low near 2332.25
  • Drifting higher since 10:30 AM on March 22 near February 15 low of 2331.25 on second attempt
  • Down trend since 3:30 AM on March 16; lower lows and lower highs;
  • Above flattening 50-bar EMA and 20-bar EMA

Previous Session

U.S. indices closed up on Wednesday March 22 after sharp decline on Tuesday. The day’s action was small compared to that on Tuesday. The real body of S&P 500 on Wednesday was a small green one near the lower end of Tuesday’s large red body. The upper and lower shadows were small. Other indices made similar candlestick pattern.

 

 

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