Morning Notes – Tuesday May 16, 2017

Directional Bias For The Day:

  • Futures are higher
  • Generally moving up since 10:30 AM on May 11; small rounding bottom pattern since Monday’s high
  • Odds are for an up day; watch for break below 2397.00 for change of fortunes
  • Key Economic data:
    • Building Permits (1.23M vs. 1.27M est.); Housing Starts (1.17M vs. 1.26M) at  8:30 AM

Markets Around The World

  • Markets in the East were mostly positive – Hong Kong closed down
  • European markets are mostly up – France is lower
  • Dollar index and USD/JPY are down; GBP/USD and EUR/USD are up
  • Commodities are mostly higher – NatGas is down
  • 10-yrs yield is at 2.342% up from May 15 close of 2.338%; 30-years is at 3.004% up from 3.006%

Key Levels:

  • Critical support levels for S&P 500 are 2399.28, 2393.94 and 2387.19
  • Critical resistance levels for S&P 500 are 2406.27, 2410.21 and 2416.38
  • Key levels for eMini futures: break above 2402.25, the high of 11:00 AM on May 15 and break below 2397.00, the low of 4:30 AM


  • Pre-NYSE session open, futures price action is to the up side – at 8:30 AM, S&P 500 futures were up by +2.25; Dow by +34.00; and NASDAQ by +7.25
  • On Monday, at 4:00 PM, S&P future (June contract) closed at 2400.25 and the index closed at 2402.32 – a spread of about 2.00 points; futures closed at 2398.50 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 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 relatively large green candle that opened above the Friday’s near doji candle with small upper and lower shadows, which was within the lower shadow of Thursday
  • Breaking above  a small down-sloping flag that it tried to break above on May 5, after falling back into it
  • 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)
  • Broken above a down-sloping flag that was emerging since 6:00 PM on May 7;
  • Uptrend since 10:00 AM on May 11; higher highs and higher lows;
  • Need to rise above 2403.75 to resume the previous uptrend since 8:00 PM on April 16; mostly moving sideways since April 25
  • Above recently rising 50-bar EMA and 20-bar EMA
30-Minute (e-mini future)
  • Up trend since 10:30 om May 11; higher highs and higher lows
  • Sideways move since 11:00 AM on May 15, slight rounding bottom; break above 2402.25 will resume the recent uptrend
  • Above rising 50-bar EMA and 20-bar EMA

Previous Session

Major U.S. indices closed higher on Monday May 15. The indices had almost no lower shadow and small upper shadow. S&P 500 broke above a vey small down-sloping flag, following through on the break above another flag on May 5.


Print Friendly, PDF & Email