Morning Notes – Tuesday August 8, 2017

Directional Bias For The Day:

  • S&P Futures are lower
  • Moving down from 2477.75, high at 4:00 AM; forming a bearish ABCD pattern
  • Odds are for a sideways to down day – watch for break above 2477.75 for a change of fortunes
  • Key economic data due:
    • JOLTS Job Opening (est. 5.74M) at 10:00 AM

Markets Around The World

  • Markets in the East closed mostly lower – Shanghai and Hong Kong were higher
  • European markets are mostly down – Spain is up
  • Dollar index, USD/JPY and GBP/USD are down; EUR/USD is up
  • Commodities are mostly higher – copper is down
  • 10-yrs yield closed at 2.257% on August 7 down from August 4 close of 2.267%; 30-years closed at 2.837% down from 2.844%

Key Levels:

  • Critical support levels for S&P 500 are 2475.94, 2468.85 and 2459.93
  • Critical resistance levels for S&P 500 are 2484.04, 2487.68 and 2496.13
  • Key levels for eMini futures: break above 2476.75, the high of 4:00 AM and break below 2474.50, the low of 10:00 PM on August 7


  • On Monday, at 4:00 PM, S&P future (September contract) closed at 2477.75 and the index closed at 2480.91 – a spread of about 3.25 points; futures closed at 2477.50 for the day; the fair value is +0.25
  • Pre-NYSE session open, futures price action is to the downside – at 8:00 AM, S&P 500 futures were down by -3.50; Dow by -23.00; and NASDAQ by -6.75

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:

  • Confirmed Uptrend
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2%
  • Another doji candle with small upper and lower shadows within previous week’s candle for the week ending on Friday August 4
  • Last week’s pivot point 2474.56; R1=2482.65, R2=2488.46; S1=2468.75, S2=2460.66
  • An up week – fourth in last five weeks; seventh 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 small bodied green candle at highest level since July 27
  • Last pattern was down-sloping flag in June, which was broken to the upside o July 13; the first target (100%) extension is near 2507.00; pattern before that was a horizontal channel, resulting in upside break, with a 100% extension target near 2480.00
  • Above 20-day EMA, 50-day EMA, 100-day and 200-day
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Continuation of indecisive pattern from Monday; break above a symmetrical triangle is faltering and the price is at the upper bound;
  • Higher highs and higher lows since 6:00 AM on July 28
  • At or below 20-bar EMA, which is above 50-bar EMA
30-Minute (e-mini future)
  • Made double (triple) top near 2477.75, at a higher level than previous few days; above an uptrend line, which is resulting in an emerging ascending triangle
  • Below 20-bar EMA and 50-bar EMA

Previous Session

Major U.S. indices closed higher on Monday, August 7. The day’s range was narrow. Dow Jones Industrial Average made another high and advanced for ninth consecutive days.

Only three S&P 500 sectors – Energy, Finance and Real Estate – were down on Monday.

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