Morning Notes – Monday December 18, 2017

Directional Bias For The Day:

  • S&P Futures are higher; moving up since 4:30 PM on December 14
  • Odds are for an day – watch for break below 2690.50 for change of fortunes
  • No Key economic data due

Markets Around The World

  • Markets in the East closed mostly higher – Seoul was down
  • European markets are higher
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • Dollar index
    • USD/JPY
    • USD/CHF
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Gold
    • Silver
    • Platinum
    • Sugar
    • Coffee
    • Cotton
    • Cocoa
    • Copper
    • Palladium
  • 10-yrs yield is at 2.374% up from December 15 close of 2.355%; 30-years is at 2.709% up from 2.689%; 2-years yield is at 1.819%; the 10-Year-&-2-Year spread is at 0.534 up from 0.527

Key Levels:

  • Critical support levels for S&P 500 are 2672.20, 2659.14 and 2652.10
  • Critical resistance levels for S&P 500 are 2683.91, 2692.02 and 2704.40
  • Key levels for eMini futures: break above 2693.50, the high of 8:30 AM and break below 2690.50, the low of 6:30 AM


  • On Friday, at 4:00 PM, S&P future (March contract) closed at 2677.50 and the index closed at 2675.81 – a spread of about +1.75 points; futures closed at 2682.00 for the day; the fair value is -4.50
  • Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up by +11.25; Dow by +170.00; and NASDAQ by +31.00

Directional Bias Before Open

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

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%
  • The week ending on December 15 was a large green candle following a near doji for previous week
  • Last week’s pivot point 2668.97; R1=2686.47, R2=2697.13; S1=2658.31, S2=2640.81; R1 was breached
  • An up week;  fourth 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
  • A green candle that opened near the middle of Thursday’s real body and closed above its high making a 3-day morning star pattern at the 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; on November 30, RSI-14 was 76.67 and the index was at 2657.74; on December 12 the index was 2669.72 and RSI was 74.77; RSI is rising and is near the 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=2671.53; R1=2683.91, R2=2692.02; S1=2663.42; S2=2651.04; R1/R2/R3 were breached
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Futures rising since 4:00 PM on December 14;
  • Broke above a triangle, not a strict one, for the second time on Friday; the height is between 45 and 60 points; the break out point is near 2666.25; the 61.8% extension target is between 2694.00 and 2704.00; the 100% extension target is between 2712.50 and 2727.50
  • 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)
  • Rising since 4:40 PM on December 14
  • RSI-14 has been staying above 65 since 6:30 AM on December 15
  • Above a rising 20-bar EMA, which is above a rising 50-bar EMA
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) has been moving up since December 14 evening;
  • Bollinger Band is started since Asian Session on Sunday with Bandwidth near 0.10; pricing hugging the upper band during this time;
  • MFI-14 is below a down trend line since European session
  • The Stochastic (9, 1, 3) turned down at 8:15 AM above 90; %K crossed below %D

Previous Session

Major U.S. indices closed up on Friday December 15. Most made all time highs. Russell 2000 and Do Jones Transportation Average are below their highs. Wilshire 5000 Total Market Index made a bullish engulfing pattern. S&P 500, NASDAQ Composite and Russell 2000 made large green candles that closed that open in the middle of Thursday’s real body and closed above its high. DJT made a piercing pattern. End of week’s price action indicates a follow through on Monday.

For the week, most major U.S. indices were positive DJT was down but it made a near doji candle near the middle of week’s range. Most major indices made bullish engulfing or near bullish engulfing patterns. Russell 2000 made a pricing pattern. For the week, Consumer Discretionary, Consumer Staples, Technology and Health Care closed higher.

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


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