Morning Notes – Monday October 16, 2017

/ October 16, 2017

Directional Bias For The Day:

  • S&P Futures are higher
  • Drifting higher since 8:30 PM on October 12; recent leg started at 3:00 AM
  • Odds are for an up to sideways day – watch for break above 2555.50 and below 2550.25 for change of fortunes
  • Key economic data due:
    • Empire State Manufacturing Index (30.2 vs. 20.3 est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly higher  – Shanghai was down
  • European markets are mostly up – Italy and Switzerland are down
  • Currencies:
    Up Down
    • Dollar index (unch.)
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • NZD/USD
    • USD/CAD
    • EUR/USD
    • AUD/USD
  • Commodities are mostly down
    Up Down
    • Crude Oil
    • Gold
    • Silver
    • Copper
    • Palladium
    • NatGas
    • Platinum
    • Sugar
    • Coffee
    • Cotton
    • Cocoa
  • 10-yrs yield closed at 2.280% on October 13 down from October 12 close of 2.323%; 30-years closed at 2.812% down from 2.853%

Key Levels:

  • Critical support levels for S&P 500 are 2552.09, 2548.31 and 2544.86
  • Critical resistance levels for S&P 500 are 2557.65, 2559.86 and 2562.08
  • Key levels for eMini futures: break above 2556.50, the high of 10:30 PM on October 15 and break below 2552.25, the low of 7:30 AM

Pre-Open

  • On Friday, at 4:00 PM, S&P future (December contract) closed at 2552.00 and the index closed at 2553.17 – a spread of about 1.25 points; futures closed at 2552.75 for the day; the fair value is -0.75
  • Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up by +1.75; Dow by +23.00; and NASDAQ by +10.00

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:

Monthly
  • Confirmed Uptrend
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2%
Weekly:
  • A near doji candle with small range
  • Last week’s pivot point 2550.81; R1=2560.01, R2=2566.86; S1=2543.96, S2=2534.76; No levels were breached
  • An up week – fifth 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 10-week EM; above 39-week SMA and 89-week SMA
  • Confirmed uptrend
Daily
  • A small red near doji candle following another near doji, which had followed a bullish engulfing candle
  • 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=2554.30; R1=2556.52, R2=2559.86; S1=2550.96, S2=2548.74; R1 was breached
  • Confirmed Uptrend
2-Hour (e-mini future)
  • At/above the upper limit of a horizontal channel – high 2553.50/2555.50 and low 2541.50
  • At 10:00 AM on September 29, 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 near 2555.00 is also achieved
  • Sequence of higher high and higher low since 12:00 PM September 5
  • At/above rising 20-bar EMA, which is above rising 50-bar EMA
30-Minute (e-mini future)
  • At the upper limit of a horizontal channel; made a double bottom at 2550.25 on Friday and the breached the intermediate high of 2555.50 on Sunday before retreating to 2552.00
  • Moving up since 8:30 PM on October 12
  • Mostly moving sideways, with an up bias, since 11:00 AM on October 5 following an up trend since the of low of 2485.00 at 11:00 AM on September 25;
  • Above flattening/drooping 20-bar EMA, which is above a flattening 50-bar EMA

Previous Session

Most major U.S. indices closed mostly higher. Russell 2000 and Dow Jones Transportation Average closed down. Most made all time highs. but the range was small and closing price was lower than the opening price. DJT made a bearish engulfing pattern.

For the week, most of the indices were up, Russell 2000 was down. S&P 500, NASDAQ Composite and NYSE Composite made near doji patterns.

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

 

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