Morning Notes – Thursday October 26, 2017

Directional Bias For The Day:

  • S&P Futures are higher
  • Moving mostly higher since 12:30 on October 25
  • Near a resistance zone – prior support that was broken,  and down trend nd 61.8% Fibonacci retracement level of the decline
  • Odds are for an up to sideways day – watch for break above 2563.00 and below 2456.25 for change of fortunes
  • Key economic data due:
    • Unemployment Claims (233K vs. 235K est.) at 8:30 AM
    • Pending Home Sales (est. 0.2%) at 10:00 AM

Markets Around The World

  • Markets in the East closed mostly higher –  Hong Kong and Seoul were down
  • European markets are mostly higher – most are rising since 11:00 AM on October 25
  • 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
    • Silver
    • Palladium
    • Sugar
    • Cocoa
    • NatGas
    • Gold
    • Copper
    • Platinum
    • Coffee
    • Cotton
  • 10-yrs yield is at 2.432% down from October 25 close of 2.444%; 30-years is at 2.944% up from 2.955%

Key Levels:

  • Critical support levels for S&P 500 are 2553.34, 2544.00 and 2541.60
  • Critical resistance levels for S&P 500 are 2559.65, 2572.18 and 2578.29
  • Key levels for eMini futures: break above 2563.00, the high of 7:30 AM and break below 2556.25, the low of 5:30 AM


  • On Wednesday, at 4:00 PM, S&P future (December contract) closed at 2554.75 and the index closed at 2557.15 – a spread of about 2.50 points; futures closed at 2558.50 for the day; the fair value is -3.75
  • Pre-NYSE session open, futures price action is to the upside – at 7:30 AM, S&P 500 futures were up by +3.25; Dow by +34.00; and NASDAQ by +9.25

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Up-to-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 large green candle with small lower shadow and no upper shadow; breaking away from previous candle
  • Last week’s pivot point 2566.19; R1=2584.46, R2=2593.71; S1=2556.94, S2=2538.67; R1/R2 were breached
  • An up week – sixth in last five weeks; eight 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
  • A red candle; almost like a hammer; lower shadow is almost 1.5 times the real body with no upper shadow
  • 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=2556.18; R1=2568.37, R2=2579.58; S1=2544.97, S2=2532.78; S1/S2/S3 were breached
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Broke below the upper limit of a horizontal channel that was broken on October 19; bounced off the lower limit of the channel
  • Broke below the 50-bar EMA and now back near it
  • Sequence of lower highs and lower lows since 6:00 PM October 22
  • At/below flattening 20-bar EMA, which is at/below flattening 50-bar EMA
30-Minute (e-mini future)
  • Drifting up since the sharp decline on October 25 that breached the lower limit of a down sloping flag; near a resistance zone, which was a prior support, and trying the break above a down trend line since the high of 9:00 AM on October 23
  • Above flat 20-bar EMA, which is at/below flat 50-bar EMA

Previous Session

Major U.S. indices declined Wednesday October 25. However, most made a recovery during the final few minutes of the trading session resulting in near reversal candlestick patterns. S&P 500, NASDAQ Composite, Wilshire 5000 Total Market Index, Russell 2000 and Dow Jones Transportation Average made red hammer candles.

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


Print Friendly, PDF & Email