Morning Notes – Wednesday September 27, 2017

Directional Bias For The Day:

  • S&P Futures are higher
  • Moving mostly up 3:30 PM on September 26
  • Near a double top at 2501.25; break above will have a target near 2510.50
  • Resistance at 2501.25 and the downtrend line from the high of September 20
  • Odds are for an up day – watch for break below 2496.75 for change of fortunes
  •  Key economic data due:
    • Core Durable Goods Orders (0.2% vs. 0.2% est.) at 8:30 AM
    • Durable Goods Orders (1.7% vs. 1.0% est.) at 8:30 AM
    • Pending Home Sales (est. -0.5%) at 10:00 AM

Markets Around The World

  • Markets in the East closed mostly down – Shanghai and Hong Kong were up; the intra-day trend was mostly down for the day with late recovery for some markets
  • European markets are mostly up – Switzerland is down; down; markets opened to the upside and are mostly flat since early trading except for Spain, which has moved higher, and Switzerland, which is moving down since the open
  • Currencies:
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
  • Commodities are mostly down
    Up Down
    • Crude Oil
    • NatGas
    • Copper
    • Cocoa
    • Gold
    • Silver
    • Platinum
    • Palladium
    • Sugar
    • Coffee
    • Cotton
  • 10-yrs yield closed at 2.229% on September 26 up from September 25 close of 2.220%; 30-years closed at 2.770% up from 2.760%

Key Levels:

  • Critical support levels for S&P 500 are 2495.12, 2488.03 and 2480.99
  • Critical resistance levels for S&P 500 are 2501.04, 2503.85 and 2508.82
  • Key levels for eMini futures: break above 2501.25, the high of 3:30 AM and break below 2496.75, the low of 5:30 AM


  • On Tuesday, at 4:00 PM, S&P future (December contract) closed at 2495.00 and the index closed at 2496.84 – a spread of about 1.75 points; futures closed at 2495.50 for the day; the fair value is -0.50
  • Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up by +5.25; Dow down by +31.00; and NASDAQ by +17.75

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Side
  • 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%
  • 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 small red candle on a positive day; breaking above a short term downtrend line; break above 2503.51 will be bullish, at least in the short term
  • 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=2498.49; R1=2501.86, R2=2506.88; S1=2493.47, S2=2490.10; R1 was breached
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Back in the middle of a horizontal channel after a break below a narrow channel; still below the downtrend line since high of 2506.75 at 2:00 PM on September 20;
  • Sequence of higher high and higher low since 12:00 PM September 5 is in danger of breaking
  • Above flattening 20-bar EMA, which is at flattening 50-bar EMA
30-Minute (e-mini future)
  • Near a double top at 2501.25 – high of 9:30 AM on September 26 and 3:30 AM of September 27; break above will have a target near 2510.50 level
  • Down trend since the of high of 2507.25 at  9:30 AM on September 20; but the sequence of lower high and lower lows is in danger of breaking
  • Rising since the low so 2485.00 at 11:00 AM on September 25
  • Above recently rising 20-bar EMA, which is above recently rising 50-bar EMA

Previous Session

Major U.S. indices closed mostly higher on Tuesday September 26. Dow Jones Industrial Average and NYSE Composite declined. Russell 2000 and Dow Jones Transportation Average made all time highs.

Market gapped up at the open. S&P 500, NASDAQ, DJIA made highs in the early trading and then trended down till afternoon. The second rally fizzled in the final hour of trading. Russell 2000 and DJT trended up for most of the day.

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


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