Morning Notes – Wednesday June 7, 2017

/ June 7, 2017

Directional Bias For The Day:

  • Futures are little changed
  • Drifting higher since 3:00 AM
  • Trading within a descending triangle since 9:30 AM on June 2
  • Odds are for sideways to an up day; watch for break below 2428.75 for change of fortunes
  • No Key economic data

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Tokyo and Mumbai Kong closed up; Hong Kong, Sydney and Seoul were down
  • European markets are mostly higher – U.K. and Spain are down
  • Dollar index and USD/JPY are up; EUR/USD and GBP/USD are down
  • Commodities are mostly down – NatGas is up
  • 10-yrs yield closed at 2.147% on June 6 down from June 5 close of 2.182%; 30-years closed at 2.810% down from 2.841%

Key Levels:

  • Critical support levels for S&P 500 are 2428.12, 2424.02 and 2413.54
  • Critical resistance levels for S&P 500 are 2436.21, 2440.23 and 2444.22
  • Key levels for eMini futures: break above 2433.25, the high of 0:30 AM and break below 2428.25, the low of 3:00 AM

Pre-Open

  • Pre-NYSE session open, futures price action is little changed – at 7:30 AM, S&P 500 futures were down by -0.25; Dow by -6.00; and NASDAQ is up by +4.00
  • On Tuesday, at 4:00 PM, S&P future (June contract) closed at 2428.75 and the index closed at 2429.33 – a spread of about 0.75 points; futures closed at 2430.75 for the day; the fair value is -2.00

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 June 2 was a large green candle with almost no upper shadow and very small lower shadow
  • Last week’s pivot point 2427.63; R1=2451.67, R2=2464.27; S1=2415.03, S2=2390.99
  • Second up week in a row – third 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
Daily
  • A small red doji with slightly larger upper shadow than the lower shadow in the lower half of the day’s range
  • Break below of 2427.71, June 2 low, is critical
  • 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)
  • Drifting down since 2:00 PM on June 2
  • Mostly sideways to down since 8:00 PM on Jun 1
  • Higher highs and higher lows since 4:00 AM on May 18;
  • At flattening 20-bar EMA and 50-bar EMA
30-Minute (e-mini future)
  • Broken symmetric triangle after June 5 NYSE session is morphing into a larger descending triangle – support at  2427.00 held; 100% extension target is near 2422.50
  • Broke above an ascending triangle at 11:30 AM on June 1 – high=2417.75, low =2406.50 – 100% extension target and 161.8% extension target achieved
  • Up trend since 5:30 AM on May 18 – higher highs and higher lows – about to make first lower low
  • At flattening 50-bar EMA and 20-bar EMA

Previous Session

Major U.S. indices closed lower on Tuesday June 6. S&P 500 and NASDAQ Composite made small red body and closed in the lower half of the day. Dow Jones Industrial Average and Dow Jones Transportation Average made dojis with slightly larger upper shadow than lower shadow. Russell 2000 and NYSE Composite made doji near the middle of the day’s range. Wilshire 5000 Total Market Index closed near the lows for the day with relative larger red body than other indices.

The break of the low of Friday is critical for the market.

 

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