Morning Notes – Friday October 6, 2017

/ October 6, 2017

Directional Bias For The Day:

  • S&P Futures are almost unchanged
  • Drifting sideways since 4:00 PM
  • Awaiting Non-Farm Payroll report at :30 AM
  • Bias will become clear post NFP report; an in-line report will increase the odds for a sideways move – watch for break below 2545.50 and above 2550.75 for change of fortunes
  • Key economic data due:
    • Non-Farm Employment Change (est. 82K) at 8:30 AM
    • Average Hourly Earnings (est. 0.3%) at 8:30 AM

Markets Around The World

  • Markets in the East were either closed or up – Shanghai and Seoul were closed
  • European markets are mostly down – Germany and U.K. are up
  • 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
    • Silver
    • Platinum (unch.)
    • Palladium
    • Sugar
    • Coffee
    • Cotton
    • Cocoa
    • Crude Oil
    • NatGas
    • Gold
    • Copper
  • 10-yrs yield closed at 2.350% on October 5 up from October 4 close of 2.333%; 30-years closed at 2.893% up from 2.877%

Key Levels:

  • Critical support levels for S&P 500 are 2549.50, 2540.02 and 2535.37
  • Critical resistance levels for S&P 500 are 2556.38, 2560.69 and 2568.87
  • Key levels for eMini futures: break above 2550.75, the high of 4:00 PM on October 5 and break below 2545.50, the low of 12:00 PM on October 5

Pre-Open

  • On Thursday, at 4:00 PM, S&P future (December contract) closed at 2549.75 and the index closed at 2552.07 – a spread of about 2.25 points; futures closed at 2550.00 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures price action is almost unchanged – at 7:30 AM, S&P 500 futures were down by -1.50; Dow down by -12.00; and NASDAQ up by +2.00

Directional Bias Before Open

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

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:
  • A green bullish engulfing candle with small lower shadow and no upper shadow
  • Last week’s pivot point 2508.94; R1=2529.86, R2=2540.35; S1=2498.45, S2=2477.53; R1/R2 and S1/S2 were breached; support levels breached after five weeks
  • An up week – fourth 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
Daily
  • A shaved top and bottom green candle that gapped up at the open
  • 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=2548.20; R1=2556.38, R2=2560.69; S1=2543.89, S2=2535.71; R1/R2/R3 were breached
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Almost no action since 4:00 PM on Thursday October 5
  • Broke above a horizontal channel – high 2506.00 and low 2487.50; 100% extension target near 2524.50 is achieved; 161.8% extension target, near 2536.00, is also achieved; 200% extension, near 2544.00, is also achieved; 261.8% extension is near 2555.00
  • Sequence of higher high and higher low since 12:00 PM September 5
  • Above rising 20-bar EMA, which is above rising 50-bar EMA
30-Minute (e-mini future)
  • Drifting sideways since 6:00 PM on October 5 – between 2549.75 and 2548.00
  • Broke above a symmetrical triangle or a pennant; achieved the triangle target near 2540.75 and 2545.00; achieved the pennant targets near 2544.00 and 2549.25
  • Up trend since the of low of 2485.00 at  11:00 AM on September 25;
  • At/above flattening 20-bar EMA, which is above rising 50-bar EMA

Previous Session

Most major U.S. indices advanced on Thursday October 5. Dow Jones Transportation Average was down. Most made all time highs. DJT is making a three-day evening star pattern. Most also gapped up from previous day. Russell 2000 made a bullish engulfing pattern.

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

 

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