Morning Notes – Thursday June 8, 2017

Directional Bias For The Day:

  • Futures are higher
  • Drifting higher since 12:30 PM on June 7
  • At the upper limit of a descending triangle, that is emerging since 9:30 AM on June 2; target for break above is near 2448.00
  • Odds are for sideways to an up day; watch for break below 2430.50 for change of fortunes
  • Key economic data:
    • Unemployment Claims (245K vs. est.241.) at 8:30 AM
    • ECB Press Conference at 8:30 AM

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Hong Kong, Sydney and Seoul Kong closed up; Tokyo and Mumbai were down
  • European markets are mostly higher – U.K. and Switzerland are down
  • Dollar index and USD/JPY are up; EUR/USD and GBP/USD are down
  • Commodities are mixed – crude oil, NatGas and copper are up; gold and silver are down
  • 10-yrs yield closed at 2.178% on June 7 up from June 6 close of 2.147%; 30-years closed at 2.837% up from 2.810%

Key Levels:

  • Critical support levels for S&P 500 are 2424.75, 2413.54 and 2403.59
  • Critical resistance levels for S&P 500 are 2436.21, 2440.23 and 2444.22
  • Key levels for eMini futures: break above 2436.75, the high of 6:30 AM and break below 2430.50, the low of 7:00 PM on June 7


  • Pre-NYSE session open, futures price action is to the upside – at 8:15 AM, S&P 500 futures were up by +2.50; Dow by +11.00; and NASDAQ by +12.50
  • On Wednesday, at 4:00 PM, S&P future (June contract) closed at 2432.25 and the index closed at 2433.14 – a spread of about 1.00 points; futures closed at 2432.00 for the day; the fair value is +0.25

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:

  • Confirmed Uptrend
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2%
  • 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
  • A small green doji with slightly shorter upper shadow than the lower shadow; the real body was above Tuesday’s real body
  • Forming a bullish flag on 30-minute chart; break above 2436.07 and target near 2460.00
  • 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)
  • Making a shallow rounding up pattern near the top
  • Trading within a range since 8:00 PM on Jun 1 – high 2439.75 and low 2424.00
  • Higher highs and higher lows since 4:00 AM on May 18;
  • Above flattening 20-bar EMA and 50-bar EMA
30-Minute (e-mini future)
  • Briefly broke below the emerging descending triangle, morphing it into a down sloping-flag, which is generally bullish in nature; break above 2435.75 will complete the pattern with 100% extension target near 24609.00
  • Up trend since 5:30 AM on May 18 – higher highs and higher lows; made one lower low and one lower high; break above 2439.75 is critical
  • Above recently rising 50-bar EMA and 20-bar EMA

Previous Session

Major U.S. indices mostly higher on Wednesday June 7. Most also made near doji patterns with relatively shorter upper shadow than the lower shadow. NYSE Composite declined but still made a near doji pattern. Dow Jones Transportation Average made bullish engulfing pattern.

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