Morning Notes – Tuesday April 4, 2017

Directional Bias For The Day:

  • The futures are lower
  • Moving lower since Monday’s close
  • Broke below 2350.25 after staying at that level for some time at 7:00 AM
  • Odds are for a down day; watch for break above 2357.50
  • On Friday, S&P 500 made a near gravestone doji candlestick pattern; on Monday it broke below doji’s; high probability of downtrend to continue today
  • Key economic data: Trade Balance (better,-43.6B) at 8:30 AM and Factory Orders (est. 1.0%) at 10:00 AM

Markets Around The World

  • Markets in the East closed mostly lower – Shanghai, Hong Kong and Mumbai were closed
  • European markets are mixed – U.K., France and STOXX 600 are up; Germany, Spain, Italy and Switzerland are down
  • Dollar index is up; EUR/USD, USD/JPY and GBP/USD are lower;
  • Commodities are higher
  • 10-yrs yield closed at 2.350% on April 3 down from March 31 close of 2.396%; 30-years closed at 2.985% down from 3.018%

Key Levels:

  • Critical support levels for S&P 500 are 2344.73, 2336.21 and 2322.25
  • Critical resistance levels for S&P 500 are 2370.42, 2381.93 and 2385.71
  • Key levels for eMini futures: break above 2351.5, high of 6:00 AM and break below 2344.75, the low of 8:00 AM


  • Pre-NYSE session open, futures price action is to the downside – at 8:45 AM, S&P 500 futures were down by -9.25, Dow  by -63.00 and NASDAQ by -25.00
  • On Monday, at 4:00 PM, S&P future (June contract) closed at 2354.75 and the index closed at 2358.84 – a spread of about 4.00 points; futures closed at 2356.00 for the day; the fair value is -1.25

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 24, was a  large green candle that made a piercing pattern closing higher than the mid-point of previous week’s bearish engulfing, which had broken below the four-week lows
  • An up week – eight in last ten 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
  • A near doji in the upper half of the day’s trading range; broke below the gravestone doji of March 31; the momentum is to the downside
  • 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; at 20-day EMA
  • Last swing low 2263.62
2-Hour (e-mini future)
  • Broke below the immediate low of the double top – two touches to 2366.75 – 10:00 AM on march 30 and 12:00 PM on March 31; the 100% extension target met; the bias continues to the downside
  • Broke above a double top – at 2:00 PM and 8:00 PM on March 29 – On march 30 but did not reached 61.8% of the target;
  • Uptrend broken; sequence of lower highs and lower lows with one exception
  • Above rising 50-bar EMA; at flattening 20-bar EMA
30-Minute (e-mini future)
  • Drifting down since 4:30 PM on April 1
  • 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 falling 50-bar EMA and 20-bar EMA

Previous Session

Major U.S. indices declined on Monday April 3. S&P 500 opened up with loss and continued it till 11:30 AM, when it tried to turn around before closing near the upper half of the day’s range but below the open. Dow Jones Industrial Average had similar price action. Smaller cap – Russell 2000 and NASDAQ Composite had larger red bodies.

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