Morning Notes – Monday May 15, 2017

Directional Bias For The Day:

  • Futures are higher
  • Generally moving up since 6:30 AM on Friday; new leg-up since 5:30 AM
  • Odds are for an up day; watch for break below above 2388.75 for change of fortunes
  • Key Economic data:
    • Empire State Manufacturing Index: -1.0 vs. 7.2 est. 8:30 AM

Markets Around The World

  • Markets in the East were mostly positive – Tokyo closed down
  • European markets are mixed – U.K., Spain and Italy are higher; Germany, France, Switzerland and STOXX 600 are lower
  • Dollar index is down; USD/JPY, GBP/USD and EUR/USD are up
  • Commodities are mostly higher – NatGas is down
  • 10-yrs yield is at 2.347% up from May 12 close of 2.335%; 30-years is at 3.011% up from 2.994%

Key Levels:

  • Critical support levels for S&P 500 are 2387.19, 2381.74 and 2369.28
  • Critical resistance levels for S&P 500 are 2399.64, 2403.87 and 2414.30
  • Key levels for eMini futures: break above 2394.5, the high of 2:30 AM and break below 2388.75, the low of 5:30 AM


  • Pre-NYSE session open, futures price action is mostly to the up side- at 9:00 AM, S&P 500 futures were up by +3.75; Dow by +47.00; and NASDAQ down by -1.50
  • On Friday, at 4:00 PM, S&P future (June contract) closed at 2388.00 and the index closed at 2390.90 – a spread of about 3.00 points; futures closed at 2388.75 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 May 12, was a red bearish engulfing candle, with small upper and lower shadows; pivot point 2392.17; R1=2302.60, R2=2414.30; S1=2380.47, S2=2370.04
  • A down week – second in last five weeks; fifth 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 small upper and lower shadows within the lower shadow of Thursday
  • Falling back into a small down-sloping flag that it tried to break above on May 5
  • 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 down-sloping flag emerging since 6:00 PM on May 7; at the upper limit; break above 2394.50 will be bullish
  • Pause in the uptrend since 8:00 PM on April 16 maybe broken; higher highs and higher lows; mostly moving sideways since April 25
  • At flattening 50-bar EMA and 20-bar EMA
30-Minute (e-mini future)
  • Up trend since 10:30 om May 11; gradually rising since 10:30 AM on May 12 – higher highs and higher lows
  • Just above recently rising 50-bar EMA but at or below a flat 20-bar EMA

Previous Session

Major U.S. indices closed mixed on Friday May 12 but the day’s range was small. Most made a doji pattern with small upper and lower shadow. Dow Jones Industrial Average and S&P 500 made doji pattern within the lower shadow of Thursday. NASDAQ Composite made similar pattern above Thursday’s high. Fro week, most indices declined. NASDAQ Composite was positive for the week.


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