Morning Notes – Friday December 1, 2017

Directional Bias For The Day:

  • S&P Futures are lower
  • Moving higher after dropping to 2631.25 at 5:30 AM along with European markets
  • Odds are for a sideways to down day – watch for break above 2645.75 and 2651.50
  • Key economic data due:
    • ISM Manufacturing PMI (est. 58.4) at 10:00 AM

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Tokyo and Sydney were up; Hong Kong, Mumbai and Seoul were down
  • European markets are mostly lower – U.K. and Switzerland are higher
  • Currencies:
    Up Down
    • Dollar index
    • AUD/USD
    • NZD/USD
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • USD/CAD
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Copper
    • Coffee
    • Cotton
    • Silver
    • Gold (unch.)
    • Palladium
    • Sugar
    • Cocoa
  • 10-yrs yield is 2.378% down from November 30 close of 2.417%; 30-years is at 2.781% down from 2.832%

Key Levels:

  • Critical support levels for S&P 500 are 2641.04, 2633.93 and 2620.32
  • Critical resistance levels for S&P 500 are 2657.74, 2670.23 and 2682.71
  • Key levels for eMini futures: break above 2645.75, the high of 3:00 AM and break below 2631.25, the low of 5:30 AM


  • On Thursday, at 4:00 PM, S&P future (December contract) closed at 2646.75 and the index closed at 2647.58 – a spread of about 0.75 points; futures closed at 2648.00 for the day; the fair value is -1.25
  • Pre-NYSE session open, futures price action is to the downside – at 8:45 AM, S&P 500 futures were down by 3.25; Dow by -8.00; and NASDAQ by -27.25

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Up
  • 30-Min: Up-to-Side
  • 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 green bodied candle with no lower shadow and the close was in the upper half of day’s range
  • 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 and the RSI-14 is rising too but still below previous high, though nearing it
  • 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=2646.42; R1=2658.90, R2=2670.23; S1=2635.09; S2=2622.61; R1/R2/R3 were breached
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Drifting down after making a high of 2658.50 at 12:00 PM on November 30; bouncing off the 20-bar EMA; has mostly stayed above  20-bar EMA since 8:00 AM on November 20
  • Trending up since 8:00 Am on November 15 with higher highs and higher lows;
  • 14-bar RSI continues to flash 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; the RSI is rising and may make a new high which will nullify the divergence signal
  • 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
  • Above rising 20-bar EMA, which is above a rising 50-bar EMA
30-Minute (e-mini future)
  • At the down trend line from highs; bouncing off the upper bound of a horizontal channel that was broken on November 30
  • Broke above a double-top or horizontal channel and achieved 161.8% extension target near 2654.25
  • Crossing a flattening 20-bar EMA, which is above a flattening 50-bar EMA
15-Minute (e-mini future)
  • Envelop and Bollinger Band are mostly moving side ways with a down bias since 6:00 PM on November 30
  • The Bollinger Band is expanding since 5:30 AM with price hugging the lower limit; price breached below the lower limits of both, the Bollinger Band and Envelop, at 5:45 AM and is trending up since then
  • The Stochastic (9, 1, 3) reached 0 at 5:30 AM and then made a positive divergence at 5:45 AM / 6:00 AM; it reached the over bought territory by 7:45 AM
  • Crossing 50-bar EMA which is above 20-bar EMA

Previous Session

Major U.S. indices closed higher on Thursday November 30. The day’s range was large. Most made all time highs. NAADAQ Composite was an exception and it made a harami candlestick pattern.

  • 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


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