Morning Notes – Monday March 27, 2017

Directional Bias For The Day:

  • The futures are sharply lower
  • Moved up from 2:30 AM lows of 2317.75 to high of 2327.50 by 5:00 AM; drifting lower since
  • Odds are for a down day; watch for break above 2337.50 for change of fortunes
  • Volatility will be elevated

Markets Around The World

  • Markets in the East closed lower
  • European markets are lower
  • Dollar index, USD/JPY and GBP/USD are lower; EUR/USD is higher;
  • Commodities are mixed – crude oil and copper are down; gold, NatGas and silver are up
  • 10-yrs yield is at 2.364% up from March 24 close of 2.359%; 30-years is at 2.976% down from 3.002%

Key Levels:

  • Critical support levels for S&P 500 are 2334.41, 2322.17 and 2311.10
  • Critical resistance levels for S&P 500 are 2350.51, 2355.19 and 2358.92
  • Key levels for eMini futures: break above 2329.00, high of 1:30 AM and break below 2317.75, the low of 2:30 AM


  • Pre-NYSE session open, futures price action is to the down side – at 8:45 AM, S&P 500 futures were down by -20.50, Dow by -153.00 and NASDAQ by -38.25
  • On Friday, at 4:00 PM, S&P future (June contract) closed at 2341.75 and the index closed at 2343.98 – a spread of about +2.25 points; futures closed at 2344.75 for the day; the fair value is -3.00

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 24, was a  bearish engulfing that broke below the four-week lows
  • A down week – only the second one in last nine weeks
  • Broke above a down-sloping flag on November 14, 2016; first target of 2285.92 and second target of 2363.14 are achieved
  • Last swing low, 2083.79, was the low on November 4, 2016
  • Above 39-week SMA and 89-week SMA
  • March 24 was a relatively larger red body, a bearish engulfing, with a larger lower shadow;
  • 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
  • Only one intraday range of more 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 and 200-day; at or near 50-day SMA/EMA; below 20-day EMA
  • Last swing low 2263.62
2-Hour (e-mini future)
  • Continue down after the break of support level of 2331.25, the low of February 15
  • Uptrend broken; sequence of lower highs and lower lows
  • Below falling 20-bar EMA and 50-bar EMA
30-Minute (e-mini future)
  • Broke below a symmetric triangle at 1:30 PM;  first target of on March 24; the target of 2324.25 was met during Asian session; the second target is near 2313.25, which is also near 2308, target from descending triangle on daily timeframe
  • Down trend since 3:30 AM on March 16; lower lows and lower highs;
  • Below falling 50-bar EMA and 20-bar EMA

Previous Session

U.S. indices closed down on Friday March 24 after very volatile trading. S&P 500 gapped up at the open and stayed in positive till 13:30 PM when they declined sharply before recovering in the last half-hour. The volatility was linked to the fate of AHCA bill in the Congress.

For the week, major U.S. indices declined.

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