Morning Notes – Friday March 31, 2017

Directional Bias For The Day:

  • The futures are lower
  • Declined during the Asian session and early European sessions
  • Moving higher since 6:30 AM
  • Below a down trend line from  high of 11:30 AM on March
  • Odds are for a sideways to down day; watch for break above 2364.25 and below 2356.75 for change of fortunes
  • Daily momentum is to the upside but there are some strong resistance at current levels
  • Key economic data: Core PCE, which came in line with expectations and Personal Spending, which was below estimates

Markets Around The World

  • Markets in the East closed mostly lower – Shanghai closed higher
  • European markets are lower
  • Dollar index, USD/JPY and EUR/USD are higher; GBP/USD is lower;
  • Commodities are mostly down – NatGas is higher
  • 10-yrs yield closed at 2.416% on March 30 up from March 29 close of 2.386%; 30-years closed at 3.025% down from 2.992%

Key Levels:

  • Critical support levels for S&P 500 are 2363.15, 2357.27 and 2352.14
  • Critical resistance levels for S&P 500 are 2370.42, 2381.93 and 2385.71
  • Key levels for eMini futures: break above 2364.25, high of 9:30 PM on March 30 and break below 2356.75, the low of 2:00 AM


  • Pre-NYSE session open, futures price action is to the down side – at 8:30 AM, S&P 500 futures were down by -3.00, Dow down by -17.00, NASDAQ by -3.25
  • On Thursday, at 4:00 PM, S&P future (June contract) closed at 2364.50 and the index closed at 2368.06 – a spread of about +3.50 points; futures closed at 2364.50 for the day; the fair value is +0.00

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
  • Small or no shadows with small green body; nearing the downtrend line from March 1 high; break below Thursday’s low of 2358.58 will be critical as it may make a 3-day reversal pattern
  • Broke a sequence of higher highs and higher lows on March 21; broke below an uptrend line since November lows
  • Uptrend under pressure; break above March 16 high of 2388.10 is critical for uptrend
  • Broke below a descending triangle on March 21; target near 2308.00 still active;  rise above 2381.93 will nullify it
  • Move above an up-sloping channel since December 27 still relevant
  • Above 100-day, 200-day and 50-day SMA/EMA; above 20-day EMA
  • Last swing low 2263.62
2-Hour (e-mini future)
  • Facing resistance – prior support – at 2365.50; broke above a double top – at 2:00 PM and 8:00 PM on March 29; has not reached 61.8% of the target;
  • drifting lower since March 30 10:00 AM high of 2366.75
  • Uptrend broken; sequence of lower highs and lower lows with one exception
  • Above recently rising 20-bar and 50-bar EMA
30-Minute (e-mini future)
  • Drifting lower since 2:30 PM on March 30
  • Down trend since 3:30 AM on March 16; sequence of lower lows and lower highs broken; within this downtrend – an uptrend from the lows of 2318.00 at 9:30 AM on March 27
  • Below drooping 50-bar EMA and 20-bar EMA

Previous Session

Major U.S. indices closed higher on Thursday. NASDAQ Composite closed at all time high but did nit make all time intraday high. S&P 500, Dow Jones Industrial Average, Russell 2000 and Dow Jones Transportation Average are below a down trend line from early March highs.

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