Morning Notes – Thursday September 21, 2017

Directional Bias For The Day:

  • S&P Futures are lower
  • Drifting down  since 3:30 PM on September 20; below a downtrend line from the high of 2507.00 at 9:30 AM on Wednesday
  • Odds are for a down to sideways day – watch for break above 2506.75
  • Key economic data due:
    • Unemployment Claims (est. 302K) at 8:30 AM
    • Philly Fed Manufacturing Index (est. 17.3) at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly lower – Tokyo was up; the intra-day trend was mostly down  sideways; Mumbai and Sydney recovered later in the day
  • European markets are higher; intra-day trend is either up or sideways after an initial up move
  • Currencies:
    Up Down
    • Dollar index
    • EUR/USD
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • GBP/USD
    • AUD/USD
    • NZD/USD
  • Commodities are mostly down
    Up Down
    • Crude Oil
    • NatGas
    • Gold
    • Silver
    • Copper
    • Platinum
    • Palladium
    • Sugar
    • Coffee
    • Cotton
    • Cocoa
  • 10-yrs yield closed at 2.277% on September 20 up from September 19 close of 2.243%; 30-years closed at 2.821% up from 2.813%

Key Levels:

  • Critical support levels for S&P 500 are 2496.67, 2493.16 and 2490.37
  • Critical resistance levels for S&P 500 are 2508.82, 2512.50 and 2516.77
  • Key levels for eMini futures: break above 2506.75, the high of 3:30 PM on September 20 and break below 2501.50, the low of 3:00 AM


  • On Wednesday, at 4:00 PM, S&P future (December contract) closed at 2506.00 and the index closed at 2508.24 – a spread of about 2.50 points; futures closed at 2505.25 for the day; the fair value is +0.75
  • Pre-NYSE session open, futures price action is to the downside – at 7:30 AM, S&P 500 futures were down by -1.25; Dow down by -7.00; and NASDAQ down by -3.75

Directional Bias Before Open

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

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%
  • A green shaven top and shaven bottom candle that gapped up from previous day’s red harami candle; all time highs after a brief – seven week pullback
  • Last week’s pivot point 2491.66; R1=2508.80, R2=2517.37; S1=2483.09, S2=2465.95; R1/R2/R3 were breached; support levels not breached for four weeks
  • 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 10-week EM; above 39-week SMA and 89-week SMA
  • Confirmed uptrend, though pulling back and moving sideways since June 5
  • A doji candle with a small upper shadow and much larger lower shadow; breached previous day’s low
  • Last pattern, a down-sloping flag in June that was broken to the upside on July 13, is re-asserted
  • Above 20-day EMA, which is above 50-day EMA; Above 100-day SMA and 200-day SMA
  • Pivot Point=2504.59; R1=2512.50, R2=2516.77; S1=2500.32, S2=2492.41; R1 & S1/S2/S3 were breached
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Not much change from Tuesday and Wednesday pre-session price action; moving sideways since 8:00 PM on September 17 in a very narrow range except for one bar of extreme move
  • Sequence of higher high and higher low since 12:00 PM September 5
  • At/above flat 20-bar EMA, which is above flattening 50-bar EMA
30-Minute (e-mini future)
  • Same as on Tuesday and Wednesday morning; drifting sideways since 8:00 PM on September 17
  • Previously emerging triangle morphed into an in-even horizontal range
  • Higher highs and higher lows, with few exceptions, since 5:00 AM on August 29
  • At/above a flat 20-bar EMA, which is at/above flat 50-bar EMA

Previous Session

Major U.S. indices closed mostly higher on Wednesday September 20. NASDAQ Composite closed down. Dow Jones Industrial Average, S&P 500, NYSE Composite and Wilshire 5000 Total Market Index made all time highs. Dow Jones Transportation Average is breaking up from a 3-4 days congestion area. Russell 2000 is near all time highs.

Just before and after FOMC announce at 2:00 PM, the volatility increased and the S&P 500 dropped from a high of 2506.75 at 12:30 PM to a low of 2494.00 at 2:30 PM. However, it recovered most of the lost ground and closed higher with a doji candle.

  • S&P 500 Sectors
Up Down
  1. Consumer Discretionary
  2. Energy
  3. Materials
  4. Industrials
  5. Finance
  6. Heath Care
  1. Consumer Staples
  2. Technology
  3. Utility
  4. Real Estate


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