Market Remarks

Morning Notes – Thursday December 14, 2017

Directional Bias For The Day:

  • S&P Futures are higher; moving sideways with up bias since 4:30 PM on December 11
  • Odds are for a sideways day, with an up bias – watch for break above 2673.50 and break below 2666.25 for change of fortunes
  • Key economic data:
    • Core Retail Sales (1.0% vs. 0.6% est.) at 8:30 AM
    • Retail Sales (0.8% vs. 0.3% est.) at 8:30 AM
    • Import Prices (0.7% vs. 0.7% est.) at 8:30 AM
    • Unemployment Claims (225K vs. 237K est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly lower – Mumbai was up
  • European markets are lower
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • USD/CAD
    • Dollar index
    • NZD/USD
  • Commodities:
    Up Down
    • Gold
    • Silver
    • Copper
    • Platinum
    • Coffee
    • Cotton
    • Cocoa
    • Crude Oil
    • NatGas
    • Palladium
    • Sugar
  • 10-yrs yield closed at 2.349% on December 13 down from December 12 close of 2.403%; 30-years closed at 2.734% down from 2.781%; 2-years yield is at 1.815%; the 10-Year-&-2-Year spread is at 0.534 down from 0.614

Key Levels:

  • Critical support levels for S&P 500 are 2659.78, 2652.67 and 2644.10
  • Critical resistance levels for S&P 500 are 2671.88, 2674.89 and 2677.90
  • Key levels for eMini futures: break above 2673.50, the high of 5:00 AM and break below 2666.25, the low of 3:30 PM on Wednesday

Pre-Open

  • On Wednesday, at 4:00 PM, S&P future (March contract) closed at 2666.25 and the index closed at 2662.85 – a spread of about +3.50 points; futures closed at 2669.00 for the day; the fair value is -0.75
  • Pre-NYSE session open, futures price action is to the upside – at 8:15 AM, S&P 500 futures were up by +2.00; Dow by +33.00; and NASDAQ by +7.50

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Up-to-Side
  • 30-Min: Side
  • 15-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:
  • The week ending on December 8 was a small red candle with small upper shadow and larger lower shadow
  • Last week’s pivot point 2647.15; R1=2669.54, R2=2687.59; S1=2629.10, S2=2606.71; No levels were breached
  • An up week;  third 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 near 2639.41 is achieved; and the 161.8% extension target is near 2835.46
    • 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 near 2612.97 is achieved
    • 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
Daily
  • A small red candle with almost no lower shadow and a small upper shadow; index gave up all of its day’s gains in the last hour of trading
  • 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; on November 30, RSI-14 was 76.67 and the index was at 2657.74; RSI is rising and approaching the previous high
  • 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=2665.86; R1=2668.87, R2=2674.89; S1=2659.84; S2=2656.83; R1 was breached
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Price action similar to that on Wednesday and Tuesday morning; drifting higher since 2:00 AM on December 6 in stairs from near the uptrend line from the lows of November 15; at the all time high
  • 14-bar RSI continues to flash divergence – on December 11 the future was at 2667.75 and the RSI was at 78.15, on December 12 the future was at 2672.25 and the RSI at 76.79; RSI drifting lower
  • 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; it is again under pressure
  • Above a rising 20-bar EMA, which is above a rising 50-bar EMA
30-Minute (e-mini future)
  • Price action similar to that on Wednesday and Tuesday morning; near a resistance level, the all time; moving sideways since 4:30 PM on December 11
  • At a flattening 20-bar EMA, which is at/above a flattening 50-bar EMA
15-Minute (e-mini future)
  • Envelop and Bollinger Band are mostly moving sideways since December 10 evening
  • The Bollinger Band (20 EMA, 2 stddev.) started contracting at 6:30 AM; price tagging the lower band; contained within the envelop (20 EMA, 0.196%)
  • The Stochastic (9, 1, 3) is falling; %K below 20 after going above it at 7:15 AM; %K has crossed below %D
  • Below 20-bar EMA, which is below 50-bar EMA

Previous Session

Major U.S. indices closed mostly higher on Wednesday December 13. S&P 500 closed down a bit after making all time high. Dow Jones Industrial Average, NYSE Composite and Wilshire 5000 Total Market Index made all time highs.

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

 

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