Market Remarks

Morning Notes – Tuesday December 26, 2017

Directional Bias For The Day:

  • S&P Futures are down to little changed; mostly moving sideways since 6:30 PM on December 21
  • In the middle of a horizontal channel on 30-Minute chart
  • Odds are for a sideways move with down bias from current levels – watch for break above 2689.50 and break below 2683.50 for change of fortunes
  • No Key economic data due:

Markets Around The World

  • Markets in the East closed mixed – Shanghai and Mumbai were up; Tokyo and Seoul were down; Hong Kong and Sydney were closed
  • European markets are closed
  • Currencies:
    Up Down
    • EUR/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • Dollar index
    • GBP/USD
    • USD/CAD
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Gold
    • Silver
    • Copper
    • Palladium
    • Sugar
    • Coffee
    • Cocoa
    • Platinum
    • Cotton
  • Bonds
    • 10-yrs yield is at 2.479% up from December 22 close of 2.485%;
    • 30-years is at 2.825% up from 2.832%
    • 2-years yield is at 1.908% up from 1.882%
    • The 10-Year-&-2-Year spread is at 0.571 down from 0.603

Key Levels:

  • Critical support levels for S&P 500 are 2676.11, 2672.20 and 2668.45
  • Critical resistance levels for S&P 500 are 2684.43, 2692.64 and 2694.44
  • Key levels for eMini futures: break above 2689.50, the high of 3:30 PM on December 22 and break below 2683.75, the low of 8:30 PM on December 25

Pre-Open

  • On Friday, at 4:00 PM, S&P future (March contract) closed at 2688.75 and the index closed at 2683.34 – a spread of about +4.25 points; futures closed at 2686.00 for the day; the fair value is +2.75
  • Pre-NYSE session open, futures price action is to the downside – at 8:00 AM, S&P 500 futures were down by -1.75; Dow down by -42.00; and NASDAQ down by -35.00

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: 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 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
Daily
  • A near doji candle with small upper shadow and larger lower shadow
  • 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; on December 18, the index was at 2694.97 and the RSI was at 75.91 and RSI fell on December 19
  • Last pattern, a down-sloping flag in June that was broken to the upside on July 13, 2017; 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=2682.27; R1=2686.42, R2=2689.49; S1=2679.20; S2=2675.05; S1 was breached
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Futures moving sideways since 4:00 on December 21; in the middle of a horizontal channel – high of 2687.50 and the low of 2679.00
  • 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
  • At flattening 20-bar EMA, which is at flattening 50-bar EMA
30-Minute (e-mini future)
  • Moving sideways since 8:30 PM on December 25 near the middle of a horizontal channel – high of 2691.50 and low of 2680.75
  • RSI-14 has fallen below 50, again, at 6:00 AM is staying below 65 since 2:30 PM on December 21; has crossed above 65 only three times since 2:30 PM on December 18
  • At/below flat 50-bar EMA, which is below flat 20-bar EMA
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) has been moving sideways since 11:00 PM on December 21 with a down bias
  • The band contracted at midnight, with bandwidth below 0.10, and remained so till 6:15 AM
  • MFI-14 is declining from 1:00 AM high of 84.34; dipped below 20 at 7:00 and now coming off it
  • The Stochastic (9, 1, 3) is toggling around 20 since 4:45 AM

Previous Session

Major U.S. indices closed lower on Friday December 22. The day’s action was small and most indices made doji like patterns. Russell 2000 made a larger red real body bearish harami patter. Dow Jones Transportation Average made a larger green bullish harami candle.

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

 

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