Morning Notes – Tuesday July 11, 2017

Directional Bias For The Day:

  • Futures are lower
  • Drifting down since 3:30 PM on July 10
  • Made a lower high of 2427.75 at 2:00 AM
  • Odds are for a sideways to down day; watch for break above 2427.75 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 lower – Germany and Italy are up
  • Dollar index, USD/JPY and GBP/USD are up; EUR/USD is down
  • Commodities are mostly lower – NatGas is up
  • 10-yrs yield closed at 2.371% on July 10, down from July 7 close of 2.393%; 30-years closed at 2.923% down from 2.935%

Key Levels:

  • Critical support levels for S&P 500 are 2422.27, 2413.52 and 2405.70
  • Critical resistance levels for S&P 500 are 2432.00, 2434.90 and 2439.17
  • Key levels for eMini futures: break above 2424.75, the high of 5:00 AM and break below 2421.50, the low of 7:30 AM

Pre-Open

  • On Monday, at 4:00 PM, S&P future (September contract) closed at 2425.50 and the index closed at 2427.43 – a spread of about 2.00 points; futures closed at 2424.50 for the day; the fair value is +1.00
  • Pre-NYSE session open, futures price action is to the downside – at 7:45 AM, S&P 500 futures were down by -2.75; Dow by -20.00; and NASDAQ by -9.00

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:

Monthly
  • Confirmed Uptrend
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2%
Weekly:
  • 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
Daily
  • A small green candle that closed above Friday’s high
  • 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
  • At 20-day EMA; above 50-day EMA; above 100-day and 200-day
  • Uptrend under pressure
2-Hour (e-mini future)
  • Mostly moving sideways since 2:00 PM on July 7
  • 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
  • At flattening 20-bar EMA, which is at flat 50-bar EMA
30-Minute (e-mini future)
  • Drifting mostly down from 2430.00 made at 3:30 PM on Monday
  • Below recently falling 20-bar, which is below 50-bar EMA

Previous Session

Major U.S. indices closed mixed Monday. The price action was within a narrow range and most made doji or small real bodied candles. S&P 500 , NASADAQ Composite and Wilshire 5000 Total Market Index were up.

Five S&P 500 sectors were up and five down. Consumer Staples, Finance, Utility, Healthcare and Real Estate were down.

 

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