Morning Notes – Monday July 10, 2017

Directional Bias For The Day:

  • Futures are almost unchanged
  • Drifting down since 11:30 PM on July 9
  • Finding resistance at 2429.00, which was prior support
  • Odds are for a sideways to down day; watch for break above 2429.25 for a change of fortunes;
  • No Key economic data due:

Markets Around The World

  • Markets in the East closed mostly higher – Shanghai was down
  • European markets are mostly higher – U.K. and Italy are down
  • Dollar index and USD/JPY are up; GBP/USD and EUR/USD are down
  • Commodities are mostly lower – NatGas is up
  • 10-yrs yield closed at 2.393% on July 7, up from July 6 close of 2.370%; 30-years closed at 2.935% up from 2.903%

Key Levels:

  • Critical support levels for S&P 500 are 2413.52, 2405.70 and 2385.68
  • Critical resistance levels for S&P 500 are 2434.90, 2439.17 and 2442.97
  • Key levels for eMini futures: break above 2426.75, the high of 6:30 AM and break below 2421.50, the low of 3:00 PM on July 7


  • On Friday, at 4:00 PM, S&P future (September contract) closed at 2422.75 and the index closed at 2425.18 – a spread of about 2.50 points; futures closed at 2422.50 for the day; the fair value is +0.25
  • Pre-NYSE session open, futures price action is mixed – at 8:15 AM, S&P 500 futures were up by +1.75; Dow down by -6.00; and NASDAQ up by +17.25

Directional Bias Before Open

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

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 July 7 was a red harami
  • Last week’s pivot point 2424.02; R1=2440.33, R2=2455.49; S1=2408.86, S2=2392.55
  • An up week – third in last five weeks; sixth in last ten weeks
  • Broke above a down sloping flag (2378.36) on April 24, which has bullish implications; first target is near 2520.00 and the second target is near 2640.00
  • Broke above a down-sloping flag on November 14, 2016; first target of 2285.92 is achieved; second target is near 2467.50
  • Last swing low, 2322.25, was the low on March 27, 2017
  • Above 39-week SMA, 89-week SMA and 10-week SMA
  • Confirmed uptrend, though pulling back
  • A large green candle that closed above Thursday’s high; almost no upper and lower shadows
  • Bouncing off the upper limit of a horizontal channel that it broke above in May – high 2400.58 and low 2322.25 – 100% extension target near 2480.00
  • Below 20-day; at 50-day EMA; above 100-day and 200-day
  • Uptrend under pressure
2-Hour (e-mini future)
  • Bounced off from the lows near 2405.00 to previous support level near 2429.00; now retraced to 2424.00 level;
  • Near the middle of a non-standard descending triangle – start on May 31; the first top made in June 19
  • Sequence of lower highs and lower lows since 2:00 PM on June 19; a move above 2436.50 will break it
  • Above rising 20-bar EMA, which is at flat 50-bar EMA
30-Minute (e-mini future)
  • Drifting down from 2429.25 made at 11:30 PM on Sunday
  • Just below recently falling 20-bar EMA but above rising 50-bar EMA

Previous Session

Major U.S. indices advanced on Friday, regaining almost all the lost ground on Thursday. The catalyst was better than expected Non-Farm Payroll report.

Most major indices rose above Thursday’s high. Dow Jones Transportation Average was the best performer with 1.24% gain followed by 1.07% by Russell 2000 and .04% by NASDAQ Composite.

Only two S&P 500 sectors were down – Consumer Staples and Energy. The best performers were  – Technology (+1.2%), Consumer Discretionary (+0.9%) and Industrials (+0.8%).

For the week, most major indices moved little. Only NYSE Composite declined and Transports was the best performer.

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