Morning Notes – Tuesday May 9, 2017

Directional Bias For The Day:

  • Futures are higher
  • Generally moving up since 11:30 AM on Monday; breaking above a flat range at 3:00 AM
  • breaking above a horizontal channel – high 2397.75 and low of 2389.75 with target near 2407.75
  • Odds are working for an up day; watch for break below above 2393.00 for change of fortunes
  • Key Economic data:
    • JOLTS Jobs Opening at 10:00 AM

Markets Around The World

  • Markets in the East were mixed – Shanghai, Hong Kong, and Mumbai were higher; Tokyo and Sydney were down; Seoul was closed
  • European markets are mostly higher – Spain is lower
  • Dollar index and USD/JPY are up; GBP/USD and EUR/USD are down
  • Commodities are mixed- crude oil, gold and silver are down; NatGas and copper are higher
  • 10-yrs yield closed at 2.376% on May 8 up from May 4 close of 2.352%; 30-years closed at 3.014% up from 2.989%

Key Levels:

  • Critical support levels for S&P 500 are 2393.92, 2389.38 and 2380.35
  • Critical resistance levels for S&P 500 are 2401.36, 2405.66 and 2409.96
  • Key levels for eMini futures: break above 2397.75, the high of 9:30 AM on May 8, and break below 2393.00, the low of 3:00 AM


  • Pre-NYSE session open, futures price action is to the up side- at 8:15 AM, S&P 500 futures were up by +3.25; Dow by +39.00; and NASDAQ by +7.75
  • On Monday, at 4:00 PM, S&P future (June contract) closed at 2395.00 and the index closed at 2399.38 – a spread of about 4.50 points; futures closed at 2395.00 for the day; the fair value is 0.00

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 May 5, was a  green candle, with no upper shadow; previous week’s chart pattern continue
  • An up week – third in a row and in last five weeks; sixth in last ten weeks
  • Broke above a down sloping flag (2378.36), which has bullish implications;
  • 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 near doji candle with no small lower shadow and smaller upper shadow
  • Breaking above a small flag with target near 2450.00
  • Broke above a down sloping flag on April 24; broke above 2378.36, which is bullish; found resistance at flag-pole high of 2400.98; the target will be near 2650.00
  • Move above an up-sloping channel since December 27 still relevant
  • Above 100-day, 200-day, 50-day SMA/EMA and 20-day EMA
  • Last swing low 2263.62
  • Uptrend under pressure
2-Hour (e-mini future)
  • Trading within a small range since 7:00 PM on Sunday but  above the narrow horizontal channel, which it broke at 2:00 PM on May 5
  • Pause in the uptrend since 8:00 PM on April 16 maybe broken; higher highs and higher lows; mostly moving sideways since April 25
  • Above rising 50-bar EMA and 20-bar EMA
30-Minute (e-mini future)
  • Sideways move since 7:00 AM on Sunday – high 2397.97 and low 2389.75
  • Uptrend since 12:00 PM on May 4 – higher highs and higher lows;
  • Reached 2403.75, just near he target of a broken channel at 6:00 PM on Sunday; retreating since
  • Just above rising 50-bar EMA but at or below a flat 20-bar EMA

Previous Session

Major U.S. indices closed mixed on Monday May 8, following French election, which calmed the markets nerves. Most indices made doji or near doji patterns with small upper and lower shadows. Dow Jones Transportation Average and Russell 2000 were exceptions and they made relatively larger red real bodies.

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