Morning Notes – Monday November 27, 2017

Directional Bias For The Day:

  • S&P Futures are little changed
  • Mostly moving sideways since 11:00 AM on November 21 with an up bias since 2:30 AM on November 23
  • Odds are for a sideway day – watch for break above 2604.50 and break below 2596.50 for change of fortunes
  • Key economic data due:
    • New Home Sales (est. 685K) at 10:00 AM

Markets Around The World

  • Markets in the East closed mostly lower – Sydney and Mumbai closed higher
  • European markets are mostly down – Spain is up
  • Currencies:
    Up Down
    • Dollar index
    • USD/CHF
    • AUD/USD
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • NZD/USD
    • USD/CAD
  • Commodities:
    Up Down
    • NatGas
    • Gold
    • Silver
    • Palladium
    • Cocoa
    • Crude Oil
    • Copper
    • Sugar
    • Coffee
    • Cotton
  • 10-yrs yield is 2.335% down from November 24 close of 2.340%; 30-years is at 2.755% down from 2.762%

Key Levels:

  • Critical support levels for S&P 500 are 2596.83, 2589.17 and 2577.62
  • Critical resistance levels for S&P 500 are 2606.41, 2608.07 and 2611.67
  • Key levels for eMini futures: break above 2604.50, the high of 6:00 AM and break below 2596.50, the low of 9:00 PM on Sunday


  • On Friday, at 1:00 PM, S&P future (December contract) closed at 2601.50 and the index closed at 2602.42- a spread of about 1.00 points; futures closed at 2601.00 for the day; the fair value is +0.50
  • Pre-NYSE session open, futures price action is little changed – at 8:30 AM, S&P 500 futures were up by +0.50; Dow by +6.00; and NASDAQ is down by -4.50

Directional Bias Before Open

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

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 almost no upper and lower shadow; three day pattern is a morning star one, albeit, without any decline
  • Last week’s pivot point 2594.96; R1=2611.67, R2=2620.93; S1=2585.70, S2=2568.99; R1 was breached
  • An up week after two down weeks; third up week in last five weeks and eight in last ten weeks
  • Broke above a down sloping flag on April 24 2017;
    • flag-low was 2322.25 during 27-Mar-17 week; shorter flag-pole length is 317.19 and longer flag-pole length is 590.88;
    • 100% extension target of shorter flag-pole is near 2639.41; and
    • 61.8% extension target of longer flag-pole is near 2687.41
  • Broke above a down-sloping flag on November 14, 2016;
    • the flag low was 2083.79 during 31-Oct-16 week; the shorter flag-pole length is 202.13 and the longer flag-pole length is 383.71;
    • 261.8% extension target of shorter flag-pole is near 2612.97; and
    • the 161.8% extension target of longer flag-pole is near 2704.63
  • 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 small green candle with small upper and lower shadows and mostly stayed above previous day’s high
  • RSI-14 divergence – on October 20 the RSI was 79.65 and the 2578,29, on November 8 the high was 2595.47 and the RSI was 72.50; the index is higher but the RSI-14 is in 60’s
  • Last pattern, a down-sloping flag in June that was broken to the upside on July 13; in August the index declined and tested the broken upper limit of the flag
  • Above 20-day EMA but above 50-day EMA; Above 100-day SMA and 200-day SMA
  • Pivot Point=2602.35; R1=2605.62, R2=2606.14; S1=2600.49; S2=2598.56; R1/R2 were breached
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Staying mostly above 20-bar EMA since 8:00 AM on November 20; bounced off it three times, last one at 8:00 PM on Sunday
  • 14-bar RSI is flashing divergence – on November 21 the index was at 2600.50 and the RSI was at 75.8, on Sunday the index was at 2603.50 and the RSI at 64.47, and at 6:00 AM on Monday, the index reached 2604.50 but the RSI managed only 56.4;
  • Sequence of higher highs and higher lows since 10:00 AM on November 2 and since August 29 with few exceptions is reasserted on November 21
  • Higher highs and higher lows since 8:00 AM on November 15
  • Above rising 20-bar EMA, which is above a rising 50-bar EMA
30-Minute (e-mini future)
  • A down trend line from the high made on November 21 was broken to the upside on Friday and was tested on Sunday
  • At a rising 20-bar EMA, which is above a rising 50-bar EMA
15-Minute (e-mini future)
  • Envelop and Bollinger Band are mostly moving side ways since mid-day on November 21
  • The Bollinger Band is expanding since 3:00 AM or the European session; price is moving up hugging the upper band
  • The Stochastic (9, 1, 3) has been declining since 4:15 AM and is in oversold territory at 7:00 AM
  • Below 20-bar EMA and at 50-bar EMA

Previous Session

Most major U.S. indices closed higher on Friday November 24, which was a short trading day due to Thanksgiving weekend. Do Jones Transportation Average declined. The day’s range was small.

For the week, major indices advanced. Russell 2000 was the best performer with 1.8% increase. All S&P sectors also advanced for the week.

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


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