Morning Notes – Wednesday April 12, 2017

Directional Bias For The Day:

  • The futures are down
  • Drifting lower since 3:30 AM high of 2356.50; given up all gains of Asian session
  • Previous day the index made a dragonfly doji, a slightly bullish pattern
  • Odds are for a sideways to down day; watch for break above 2356.50 and below 2345.50 for change of fortunes
  • Key economic data: Import prices (-0.2% vs. -0.3% est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Tokyo and Mumbai closed down; Hong Kong, Sydney and Seoul closed up
  • European markets are mixed – Germany, France, Switzerland and STOXX 600 are higher; U.K., Spain and Italy are lower
  • Dollar index and GBP/USD are almost unchanged; USD/JPY and EUR/USD are lower
  • Commodities are mixed – crude oil, gold and silver are up; NatGas and copper are lower
  • 10-yrs yield is at 2.289% down from April 11 close of 2.293%; 30-years is at 2.925% down from 2.929%

Key Levels:

  • Critical support levels for S&P 500 are 2346.33, 2337.25 and 2322.25
  • Critical resistance levels for S&P 500 are 2355.22, 2363.47 and 2366.37
  • Key levels for eMini futures: break above 2356.50, the high of 3:30 AM and break below 2345.50, the low of 9:00 PM on April 11


  • Pre-NYSE session open, futures price action is to the downside – at 9:00 AM, S&P 500 futures were down by -4.00, Dow  by -21.00 and NASDAQ by -8.50
  • On Tuesday, at 4:00 PM, S&P future (June contract) closed at 2350.25 and the index closed at 2353.78 – a spread of about 3.50 points; futures closed at 2352.50 for the day; the fair value is -2.25

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 April 7, was a  small red candle, a harami with open and close within the body of previous large green candle
  • A down week – third 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
  • Confirmed uptrend, though pulling back
  • A dragonfly doji with a very small upper shadow
  • 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)
  • April 11 10:00 AM candle made a low and formed a TCLOS pattern – a short term bullish pattern; from the low of 2333.25 15 10:00 AM the futures rose to a high of 2356.50 by 2:00 AM on April 12; drifting lower since then
  • Sideways move since 2:00 PM on April 5
  • Below flat 50-bar EMA and 20-bar EMA
30-Minute (e-mini future)
  • Drifting lower after making a high of 2356.50 at 2:00 AM; given up all gains during the Asian session; now at the lows of 9:00 AM on April 11
  • Sideways move since 3:00 AM on April 5; trading between 2361.25 and 2336.75
  • Below flat 20-bar EMA and 50-bar EMA

Previous Session

Major U.S. indices closed mixed on Tuesday April 11. S&P 500 started the day in red and made day’s low in the first hour of trading. After that it generally moved higher closing near the open and made a near dragonfly doji. Russell 2000 and NYSE Composite closed up for the day.


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