Morning Notes – Thursday June 1, 2017

/ June 1, 2017

Directional Bias For The Day:

  • Futures are unchanged
  • Moving sideways since 6:00 PM on May 31
  • Odds are for a sideways day; watch for break above 2416.75 and below 2407.75 for change of fortunes
  • Key economic data:
    • ADP Non-Farm Employment Change (est. 181K) at 8:15 AM
    • Unemployment Claims (est. 239K) at 8:30 AM

Markets Around The World

  • Markets in the East were mixed – Shanghai, Mumbai and Seoul were lower; Hong Kong, Tokyo and Sydney were higher
  • European markets are mostly higher – Spain is lower
  • Dollar index, GBP/USD and USD/JPY are up; EUR/USD is down
  • Commodities are mixed – crude oil and NatGas are up; gold, silver and copper are down
  • 10-yrs yield closed at 2.196% on May 31 down from May 30 close of 2.217%; 30-years closed at 2.857% down from 2.886%

Key Levels:

  • Critical support levels for S&P 500 are 2403.59, 2397.99 and 2387.21
  • Critical resistance levels for S&P 500 are 2415.99, 2418.71 and 2422.86
  • Key levels for eMini futures: break above 2416.75, the high of 8:00 AM on May 31 and break below 2407.75, the low of 7:30 AM on May 30

Pre-Open

  • Pre-NYSE session open, futures price action is mixed – at 7:30 AM, S&P 500 futures were up by +0.75; Dow down by -10.00; and NASDAQ up by +5.50
  • On Wednesday, at 4:00 PM, S&P future (June contract) closed at 2410.25 and the index closed at 2411.80 – a spread of about 1.50 points; futures closed at 2411.00 for the day; the fair value is -0.75

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Side
  • 30-Min: Side

The trend and patterns on various time frames for S&P 500 are:

Monthly
  • Confirmed Uptrend
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2%
Weekly:
  • Candlestick for the last week, Friday May 26 was a large green candle with almost no lower shadow and very small upper shadow
  • Last week’s pivot point 2407.15; R1=2427.38, R2=2438.94; S1=2395.59, S2=2375.36
  • An up week – third 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
Daily
  • A small hammer candle but not after a decline
  • Above a horizontal channel – high 2400.58 and low 2322.25 – 100% extension target near 2480.00
  • Formed a double top – March 1 high of 2400.98 and May 16 high of 2405.77; the intermediate low is 2322.25; a break below it will have a target near 2240.00 level
  • Falling back within the down sloping flag that it broke above on April 24; break below 2328.95 will nullify the pattern
  • Move above an up-sloping channel since December 27 still relevant
  • Above 20-day and 50-day EMA; above 100-day and 200-day
  • Last swing low 2263.62
  • Mostly sideways move since February 17 – high near 2400 and the lo near 2330
  • Uptrend resumed
2-Hour (e-mini future)
  • In a narrow range since 10:00 PM on May 24
  • Making a slight round top pattern since 8:00 AM on May 26
  • Higher highs and higher lows since 4:00 AM on May 18;
  • At flat 20-bar EMA; at-to-above 50-bar EMA
30-Minute (e-mini future)
  • In a narrow range since 4:30 PM on May 31
  • The emerging descending triangle was broken to the downside; price back in that range
  • Up trend since 5:30 AM on May 18 – higher highs and higher lows – about to make first lower low
  • At-to-above flat 50-bar EMA and 20-bar EMA

Previous Session

Most of the major U.S. indices closed down on Wednesday May 31. Dow Jones Transportation Average was up.

The market made lows in the first half hour of trading and then mostly traded up.

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