Morning Notes – Wednesday April 5, 2017

Directional Bias For The Day:

  • The futures are higher
  • Moving higher since 3:30 AM
  • Broke above April 4 high
  • Odds are for an up day but strong resistance at 2366.75 level
  • Key economic data: ADP (+263K – better) at 8:15 AM; Non-Mfg. ISM (est. 57) at 10:00 AM and FOMC meeting minutes at 2:00 PM

Markets Around The World

  • Markets in the East closed mostly higher – Seoul was the only exception
  • European markets are mostly higher – Germany and Switzerland are down
  • Dollar index, USD/JPY and GBP/USD are higher; EUR/USD is lower
  • Commodities are mixed – crude oil and copper are up; gold, silver and NatGas are lower
  • 10-yrs yield is at 2.373% up from April 4 close of 2.350%; 30-years is at 3.011% up from 2.993%

Key Levels:

  • Critical support levels for S&P 500 are 2350.72, 2344.73 and 2336.21
  • Critical resistance levels for S&P 500 are 2370.42, 2381.93 and 2385.71
  • Key levels for eMini futures: break above 2363.25, the high of 2:00 AM on April 3 and break below 2353.25, the low of 7:00 AM


  • Pre-NYSE session open, futures price action is to the upside – at 8:45 AM, S&P 500 futures were up by +4.50, Dow  by +55.00 and NASDAQ by +2.00
  • On Tuesday, at 4:00 PM, S&P future (June contract) closed at 2356.25 and the index closed at 2360.16 – a spread of about 4.00 points; futures closed at 2356.00 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 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 small body with small shadows near the real body of Monday’s near doji; indicating mostly indecision
  • 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)
  • Moving higher since 12:00 PM low on April 3; higher highs and higher low since then; next resistance near 2366.75
  • 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;
  • 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)
  • A zig-zag pattern up since 12:00 PM low on April 3; breaking above April 3 highs
  • 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 closed mostly higher on Tuesday April 4. Russell 2000 was the only one to decline. S&P 500 opened at the low end of the day and then mostly moved higher. Other indices followed the similar pattern.


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