Morning Notes – Friday April 7, 2017

Directional Bias For The Day:

  • The futures are unchanged but higher following sharp decline of nearly 20 points during Asian session
  • Fresh move higher since 5:30 AM
  • Odds are for an up day; watch for break below 2347.50 for change of fortunes
  • Key economic data: Non-Farm Payroll (est. 174K); avg. Hourly Earnings (est. 0.2%) and Unemployment Rate (4.7%) at 8:30 AM

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Tokyo and Sydney closed up; Hong Kong, Mumbai and Seoul closed down
  • European markets are mostly lower – U.K and Italy are higher
  • Dollar index is higher; USD/JPY, 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 2.343% on April 6 down from April 5 close of 2.357%; 30-years closed at 2.987% up from 3.006%

Key Levels:

  • Critical support levels for S&P 500 are 2353.03, 2348.90 and 2344.73
  • Critical resistance levels for S&P 500 are 2364.16, 2368.90 and 2381.93
  • Key levels for eMini futures: break above 2356.50, the high of 8:30 PM on April 6 and break below 2347.50, the low of 5:30 AM


  • Pre-NYSE session open, futures price action is almost unchanged – at 7:30 AM, S&P 500 futures were up by +0.50, Dow  by +7.00 and NASDAQ by +2.00
  • On Thursday, at 4:00 PM, S&P future (June contract) closed at 2354.50 and the index closed at 2357.49 – a spread of about 3.00 points; futures closed at 2353.75 for the day; the fair value is +0.75

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 small harami candle within a larger bearish engulfing pattern, near lower end of the previous day’s real body;
  • 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)
  • Made a low during Asian session due to geo-politics; bounced off making a low below April 5 low; now unchanged for the day
  • 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 2336.75 at 9:30 PM on April 6
  • 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 higher on Thursday April 6. S&P 500 started the day higher and the made its low in the first half hour of trading. It reached day’s high at 1:30 PM and then declined slightly to close the day higher. Other indices followed similar price pattern.

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