Morning Notes – Thursday April 6, 2017

Directional Bias For The Day:

  • The futures are higher but at last NYSE session close level
  • Moving higher since making a low of 2338.00 at 10:30 PM on April 5
  • Odds are for a down day; watch for break above 2352.50 for change of fortunes
  • Key economic data: Unemployment Claims (234K – better) at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly lower – Shanghai was up
  • European markets are mostly lower – France and Spain are up
  • Dollar index and USD/JPY are higher; EUR/USD and GPB/USD are lower
  • Commodities are mixed – crude oil, gold and silver are up; NatGas and copper are lower
  • 10-yrs yield closed at 2.357% on April 5 up from April 4 close of 2.350%; 30-years closed at 3.006% 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 2368.90, 2381.93 and 2385.71
  • Key levels for eMini futures: break above 2352.50, the low of 3:30 AM on April 5 and break below 2343.50, the low of 4:30 AM


  • Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up by +1.25, Dow  by +12.00 and NASDAQ by +4.75
  • On Wednesday, at 4:00 PM, S&P future (June contract) closed at 2348.25 and the index closed at 2352.95 – a spread of about 4.75 points; futures closed at 2346.50 for the day; the fair value is +1.75

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 large bearish engulfing pattern; day’s high found a resistance at the downtrend line below March 21 high
  • 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)
  • Bouncing off the lows made in the early Asian session
  • Uptrend broken; sequence of lower highs and lower lows with one exception
  • Below falling 50-bar EMA; at flattening 20-bar EMA
30-Minute (e-mini future)
  • Drifting higher after making a low of 2338.00 at 10:30 PM on April 5
  • 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
  • Above 20-bar EMA but below 50-bar EMA

Previous Session

Major U.S. indices closed lower on Wednesday April 5. All were higher mid-day by 0.3% to 1.0% but gave it up and then declined by similar amount. Most made a bearish engulfing pattern.


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