Morning Notes – Wednesday January 31, 2018

Directional Bias For The Day:

  • S&P Futures are higher and trending up since 1:00 PM on January 30
  • Trying the break above an ascending triangle on 30-Minute chart
  • Odds are for an up day; good chance of increased volatility – watch for break below 2828.50 for a change of fortunes
  • Key economic data due:
    • ADP Non-Farm Employment Change (234K vs. 186K est.) at 8:15 AM
    • Employment Cost Index (0.6% vs. 0.6% est.) at 8:30 AM
    • Chicago PMI (est. 64.2) at 9:45 AM
    • Pending Home Sales (est. 0.5%) at 10:00 AM
    • FOMC Funds Rate and Statement at 2:00 PM

Markets Around The World

  • Markets in the East closed mostly down – Hong Kong and Sydney were up
  • European markets are mostly up – U.K. is down
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • Dollar index
    • USD/CHF
    • USD/CAD
  • Commodities:
    Up Down
    • Gold
    • Silver
    • Copper
    • Platinum
    • Coffee
    • Cocoa
    • Crude Oil
    • NatGas
    • Palladium
    • Sugar
    • Cotton
  • Bonds
    • 10-yrs yield closed at 2.726% on January 30 up from January 29 close of 2.696%;
    • 30-years closed at 2.980% up from 2.941%
    • 2-years yield is at 2.133% up from 2.125%
    • The 10-Year-&-2-Year spread is at 0.601 up from 0.572

Key Levels:

  • Critical support levels for S&P 500 are 2819.76, 2807.54 and 2795.40
  • Critical resistance levels for S&P 500 are 2837.49, 2837.75 and 2851.48
  • Key levels for eMini futures: break above 2839.00, the high of 7:30 AM and break below 2828.50, the low of 5:00 AM

Pre-Open

  • On Tuesday, at 4:00 PM, S&P future (March contract) closed at 2823.50 and the index closed at 2822.43 – a spread of about +1.00 points; futures closed at 2824.50 for the day; the fair value is -1.00
  • Pre-NYSE session open, futures price action is to the upside – at 8:15 AM, S&P 500 futures were up by +12.25; Dow by +220.00; and NASDAQ by +32.25

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Up-Side
  • 30-Min: Down-Side
  • 15-Min: Down-Side
  • 6-Min: Down-Side

The trend and patterns on various time frames for S&P 500 are:

Monthly
  • Confirmed Uptrend
  • December 2017 closed higher; index has been higher for the nine straight months; it has only one down month, March 2017, since October 2016
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2%
Weekly:
  • The week ending on January 26 was a large body green candle, with almost no upper and lower shadows
  • Last week’s pivot point 2851.29 R1=28294.45 R2=2916.04; S1=2829.70, S2=2786.54; R1/R2/R3 were breached;
  • An up week;  fourth in last five weeks and ninth 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 near 2687.41 is achieved; the 100% extension target is near 2913.13
  • 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 near 2704.63 is achieved; the 261.8% extension target is near 3088.34
  • 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
  • Confirmed Uptrend
  • Gap down – gap low at 2837.75, the January 30 low, and gap high at 2851.48, the January 29 low
  • Last big pattern, a down-sloping flag in June 2017, was broken to the upside on July 13, 2017; in August the index declined and tested the broken upper limit of the flag; since then the index has made three very small flags; it broke to the upside of the last flag on January 2
  • Above 20-day EMA but above 50-day EMA; Above 100-day SMA and 200-day SMA
2-Hour (e-mini future)
  • Broke below the horizontal channel that it broke above on January 26; now back in at during Asian session
  • RSI-9 diverged; was in the making since January 24; RSI at the lowest level since December 29; higher probability of continued weakness till RSI reaches above 65; RSI bouncing off 18.88 to 48.52
  • Sequence of higher highs and higher lows since 10:00 AM on November 2 and since August 29 with few exceptions; again under pressure
  • Below 20-bar EMA, which is below EMA10 of EMA50
  • Bias: Up-Side
30-Minute (e-mini future)
  • At a resistance zone based upon a confluence of broken support and resistance highs
  • Ascending triangle emerging; at the upper limit; 61.8% extension target is near 2846.00 and 100% extension target is near 2852.50
  • RSI-14 is rising since the low of 22.92 at 9:30 AM on Saturday 30; Hovering around 65
  • Above 20-bar EMA but below 50-bar EMA
  • Bias: Down-Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is sideways since 3:00 PM on January 30
  • The band width is relative same since NYSE session close
  • The Stochastic (9, 1, 3): %K diverged at 5:15 AM below 20 and is now at near 80 after making an upward knee at 6:30 AM
  • Bias: Down-Side

Previous Session

Major U.S. indices closed sharply lower on Tuesday January 30. Indices gapped down at the open and then stayed down. S&P 500 made day’s low at 10:00 AM with a green hammer candlestick with a low of 2818.27. The index tried to test I later in the day but did come very close. This should act as a support for a while. NASDAQ Composite made a similar candle but with a large green body that was equal to lower shadow. NASDAQ also closed above the open. It 10:00 AM low support is 7373.99. NYSE made a doji candle at 10:00 AM and its lows has been tested though we are not out of the woods. Wilshire 5000 Total Market Index made a pattern similar to that of S&P 500.

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

 

Morning Notes – Tuesday January 30, 2018

Directional Bias For The Day:

  • S&P Futures are down and moving down since 5:00 AM
  • An up-sloping flag on 6-minute chart is broken to the downside but there is a support at 2831.00, a break below it would be quite bearish
  • Odds are for down day; good chance of increased volatility – watch for break above 2845.75 for change of fortunes
  • Key economic data due:
    • CB Consumer Confidence (est. 123.2) at 10:00 AM

Markets Around The World

  • Markets in the East closed down – relatively large declines
  • European markets are down – relatively large declines
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
  • Commodities:
    Up Down
    • Gold
    • Silver
    • Copper
    • Sugar
    • Cocoa
    • Crude Oil
    • NatGas
    • Platinum
    • Palladium
    • Coffee
    • Cotton
  • Bonds
    • 10-yrs yield is at 2.711% up from January 29 close of 2.696%;
    • 30-years is at 2.963% up from 2.941%
    • 2-years yield is at 2.120% down from 2.124%
    • The 10-Year-&-2-Year spread is at 0.591 up from 0.572

Key Levels:

  • Critical support levels for S&P 500 are 2846.18, 2830.94 and 2824.81
  • Critical resistance levels for S&P 500 are 2867.45, 2872.09 and  2884.75
  • Key levels for eMini futures: break above 2845.75, the high of 5:00 AM and break below 2831.00, the low of 11:00 PM on January 29

Pre-Open

  • On Monday, at 4:00 PM, S&P future (March contract) closed at 2853.00 and the index closed at 2853.53 – a spread of about -0.50 points; futures closed at 2853.50 for the day; the fair value is -0.50
  • Pre-NYSE session open, futures price action is to the downside – at 8:45 AM, S&P 500 futures were down by -17.50; Dow by -247.00; and NASDAQ by -47.50

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Up-Side
  • 30-Min: Side-Down
  • 15-Min: Down
  • 6-Min: Down

The trend and patterns on various time frames for S&P 500 are:

Monthly
  • Confirmed Uptrend
  • December 2017 closed higher; index has been higher for the nine straight months; it has only one down month, March 2017, since October 2016
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2%
Weekly:
  • The week ending on January 26 was a large body green candle, with almost no upper and lower shadows
  • Last week’s pivot point 2851.29 R1=28294.45 R2=2916.04; S1=2829.70, S2=2786.54; R1/R2/R3 were breached;
  • An up week;  fourth in last five weeks and ninth 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 near 2687.41 is achieved; the 100% extension target is near 2913.13
  • 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 near 2704.63 is achieved; the 261.8% extension target is near 3088.34
  • 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
  • Confirmed Uptrend
  • Last big pattern, a down-sloping flag in June 2017, was broken to the upside on July 13, 2017; in August the index declined and tested the broken upper limit of the flag; since then the index has made three very small flags; it broke to the upside of the last flag on January 2
  • Above 20-day EMA but above 50-day EMA; Above 100-day SMA and 200-day SMA
2-Hour (e-mini future)
  • Back to the lower limit of a horizontal channel that it broke above on January 26, after reach the 100% extension target; a break below 2833 may open the target in 2790’s
  • RSI-9 divergence that was in the making since January 24; RSI at the lowest level since December 29; higher probability of continued weakness till RSI reaches above 65
  • Sequence of higher highs and higher lows since 10:00 AM on November 2 and since August 29 with few exceptions; again under pressure
  • Below 50-bar EMA, which is at EMA10 of EMA50
  • Bias: Up-Side
30-Minute (e-mini future)
  • Below a down trend line from the highs; forming an up-sloping flag, which broke to the down side in a sideways move
  • Last pattern bullish ABCD or symmetric triangle broke to the upside on January 22; 261.8% extension target near 2867.50 is achieved
  • RSI-14 is declining since 9:00 PM on January 28; bounced off just above 20 and the downtrend line on it broke, which increases the chance of downtrend on price to be broken unless RSI falls below the lows reached during Asian session
  • Below 20-bar EMA which is below 50-bar EMA
  • Bias: Side-Down
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is sloping down since 8:45 PM on January 28; bouncing up since 3:00 AM
  • The band expanded during the Asian session but is contracting, relatively, from 3:15 AM
  • The Stochastic (9, 1, 3): %K is below 20
  • Bias: Down

Previous Session

Major U.S. indices closed lower on Monday January 29. Large cap indices made red harami pattern within a large green candle. Dow Jones Transportation Average made a shooting star candle and Russell 2000 made a bearish engulfing. A break below Monday’s low will be bearish.

  • 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

 

Morning Notes – Monday January 29, 2018

Directional Bias For The Day:

  • S&P Futures are lower
  • An up-sloping flag is emerging on 6-minute chart and a break below 2864 will be bearish
  • Made all time high at the week’s open, good probability that it may be tested
  • Odds are an up to sideways day; good chance of increased volatility – watch for break above 2874.75 and below 2844.25 for change of fortunes
  • Key economic data due:
    • Personal Spending (0.4% vs. 0.5% est.) at 8:30 AM
    • Core PCE Price Index (0.2% vs. 0.2% est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Hong Kong and Tokyo were down; Mumbai, Sydney and Seoul were up
  • European markets are mixed – Germany, Spain, Switzerland and STOXX 600 are down; U.K., France and Italy are up
  • Currencies:
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Gold
    • Silver
    • Platinum
    • Palladium
    • Cotton
    • Copper
    • Sugar
    • Coffee
    • Cocoa
  • Bonds
    • 10-yrs yield is at 2.707% up from January 26 close of 2.703%;
    • 30-years is at 2.950% up from 2.911%
    • 2-years yield is at 2.136% up  from 2.112%
    • The 10-Year-&-2-Year spread is at 0.571 down from 0.591

Key Levels:

  • Critical support levels for S&P 500 are 2858.98, 2846.18 and 2830.94
  • Critical resistance levels for S&P 500 are 2872.09, 2881.77 and 2890.66
  • Key levels for eMini futures: break above 2874.75, the high of 2:00 AM and break below 2864.00, the low of 5:00 AM

Pre-Open

  • On Friday, at 4:00 PM, S&P future (March contract) closed at 2873.00 and the index closed at 2872.87 – a spread of about +0.25 points; futures closed at 2874.50 for the day; the fair value is -1.50
  • Pre-NYSE session open, futures price action is to the downside – at 9:15 AM, S&P 500 futures were down by -9.50; Dow by -59.00; and NASDAQ by -21.50

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Up-Side
  • 30-Min: Side-Down
  • 15-Min: Down
  • 6-Min: Down

The trend and patterns on various time frames for S&P 500 are:

Monthly
  • Confirmed Uptrend
  • December 2017 closed higher; index has been higher for the nine straight months; it has only one down month, March 2017, since October 2016
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2%
Weekly:
  • The week ending on January 26 was a large body green candle, with almost no upper and lower shadows
  • Last week’s pivot point 2851.29 R1=28294.45 R2=2916.04; S1=2829.70, S2=2786.54; R1/R2/R3 were breached;
  • An up week;  fourth in last five weeks and ninth 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 near 2687.41 is achieved; the 100% extension target is near 2913.13
  • 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 near 2704.63 is achieved; the 261.8% extension target is near 3088.34
  • 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
  • Confirmed Uptrend
  • Last big pattern, a down-sloping flag in June 2017, was broken to the upside on July 13, 2017; in August the index declined and tested the broken upper limit of the flag; since then the index has made three very small flags; it broke to the upside of the last flag on January 2
  • Above 20-day EMA but above 50-day EMA; Above 100-day SMA and 200-day SMA
2-Hour (e-mini future)
  • Broke above an Ascending triangle at 8:00 AM on January 22; 161.8% extension target near 2872.01 is achieved
  • RSI-9 divergence could still happen; at 6:00 PM on January 14 the price made a high of 2787.50 and RSI was 90.39; at 4:00 AM on January 16, the price made a high of 2803.50 but the RSI was at 85.63; at 2:00 AM on January 23, the price made 2842.00 and RSI was at 90.04; 1t 8:00 PM on January 28, the price was 2878.25 and RSI was 87.91
  • Sequence of higher highs and higher lows since 10:00 AM on November 2 and since August 29 with few exceptions; under pressure
  • Above flattening 20-bar EMA, which is above rising EMA10 of EMA50
  • Bias: Up-Side
30-Minute (e-mini future)
  • Broke above a symmetrical on January 24; High=2855.25, Low=2825.50; the 61.8% extension target near 2870.64 is achieved; the 100% extension target is near 2882.00
  • Last pattern bullish ABCD or symmetric triangle broke to the upside on January 22; 261.8% extension target near 2867.50 is achieved
  • RSI-14 is declining since 9:00 PM on Sunday; it is hovering around 50; a break below will be ominous
  • At 50-bar EMA which is below 20-bar EMA
  • Bias: Side-Down
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is sloping down since 8:45 PM on January 28
  • The band expanded during the Asian session, then contracted briefly, then expanded and then again contracted briefly just before the NYSE open
  • The Stochastic (9, 1, 3): %K is below 20
  • Bias: Down

Previous Session

Major U.S. indices closed higher on Friday January 26. The gains across the board were large. There were almost no upper and lower shadows. Most indices made all time highs. Dow Jones Transportation Average made a green harami candle within a larger red candle. Russell 2000 is making a morning star type pattern. The high on Friday did not reach the high on Wednesday, the first candle of the morning star.

For the week, most indices made large gains. DJT declined and is making an evening star pattern. Russell 2000 had larger upper shadow and smaller body and almost no lower shadow. The candle could become an evening star. Most indices made large green candles with almost no upper and lower shadow. For the week, all S&P 500 sectors were up.

  • 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

 

Morning Notes – Friday January 26, 2018

Directional Bias For The Day:

  • S&P Futures are higher
  • A symmetrical triangle is forming on 30-minute charts with price near the upper bound
  • Odds are an up day, but sideways to down from pre-open levels  – watch for break above 2853.50 and below 2844.25 for change of fortunes
  • Key economic data due:
    • Advanced GDP (2.6% vs. 3.0% est.) at 8:30 AM
    • Advanced GDP Price Index (2.4% vs. 2.3% est.) at 8:30 AM
    • Core Durable Goods Orders (0.6% vs. 0.5% est.) at 8:30 AM
    • Durable Goods Orders (2.9% vs. 0.9% est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly  higher – Tokyo was down; Mumbai and Sydney were closed
  • European markets are higher
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Sugar
    • Coffee
    • Cocoa
    • Gold
    • Silver
    • Copper
    • Platinum
    • Palladium
    • Cotton
  • Bonds
    • 10-yrs yield is at 2.640% up from January 25 close of 2.621%;
    • 30-years is at 2.895% up from 2.880%
    • 2-years yield is at 2.112% up  from 2.088%
    • The 10-Year-&-2-Year spread is at 0.528 down from 0.533

Key Levels:

  • Critical support levels for S&P 500 are 2830.94, 2824.81 and 2815.90
  • Critical resistance levels for S&P 500 are 2848.56, 2852.97 and 2855.60
  • Key levels for eMini futures: break above 2852.25, the high of 7:00 AM and break below 2844.25, the low of 2:00 AM

Pre-Open

  • On Thursday, at 4:00 PM, S&P future (March contract) closed at 2839.75 and the index closed at 2897.25 – a spread of about +0.50 points; futures closed at 2841.25 for the day; the fair value is -1.50
  • Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up by +8.75; Dow by +47.00; and NASDAQ by +16.25

Directional Bias Before Open

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

The trend and patterns on various time frames for S&P 500 are:

Monthly
  • Confirmed Uptrend
  • December 2017 closed higher; index has been higher for the nine straight months; it has only one down month, March 2017, since October 2016
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2%
Weekly:
  • The week ending on January 19 was a small body green candle, a hammer with almost no upper shadow but large lower shadow; the  weekly change was a healthy +0.9% but lower than previous two weeks’ +.26% and +1.6%
  • Last week’s pivot point 2796.42; R1=2824.021 R2=2838.11; S1=2782.52, S2=2754.73; 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 near 2687.41 is achieved; the 100% extension target is near 2913.13
  • 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 near 2704.63 is achieved; the 261.8% extension target is near 3088.34
  • 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
  • Confirmed Uptrend
  • Last big pattern, a down-sloping flag in June 2017, was broken to the upside on July 13, 2017; in August the index declined and tested the broken upper limit of the flag; since then the index has made three very small flags; it broke to the upside of the last flag on January 2
  • Above 20-day EMA but above 50-day EMA; Above 100-day SMA and 200-day SMA
2-Hour (e-mini future)
  • Broke above an Ascending triangle at 8:00 AM on January 22; Low=2769.25, High=2808.50; 100% extension near 2847.75 is achieved in early morning; 161.8% extension target is near 2872.00
  • RSI-9 divergence could still happen; at 6:00 PM on January 14 the price made a high of 2787.50 and RSI was 90.39; at 4:00 AM on January 16, the price made a high of 2803.50 but the RSI was at 85.63; at 2:00 AM on January 23, the price made 2842.00 and RSI was at 90.04;
  • RSI approaching a down trend line; break above would be bullish for price to follow
  • Sequence of higher highs and higher lows since 10:00 AM on November 2 and since August 29 with few exceptions; under pressure
  • Above flattening 20-bar EMA, which is above rising EMA10 of EMA50
  • Bias: Up-Side
30-Minute (e-mini future)
  • A symmetrical triangle forming – first high of 2855.50 on January 24 and first low of 2825.50 on January 24
  • Last pattern bullish ABCD or symmetric triangle broke to the upside on January 22; 161.8% extension target near 2838.50 is achieved; 261.8% extension target is near 2867.50
  • RSI-14 staying above 50 since 4:00 Pm on January 25
  • Above 20-bar EMA, which is above  EMA10 of EMA50
  • Bias: Up-Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is sloping sideways, mostly, since 10:00 AM on January 22
  • The band contracted during the Asian session; expansion since 5:00 AM started to peter out by 7:00 AM
  • The Stochastic (9, 1, 3): %K declined to 25 at 7:30 AM from 100 at 6:45 AM
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mostly higher on Thursday January 25. NASDAQ Composite and Dow Jones Transportation Average were down. Dow Jones Industrial Average made all time high but its volume was 22% lower than previous day. Volume was down for most indices.

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

 

Morning Notes – Thursday January 25, 2018

Directional Bias For The Day:

  • S&P Futures are higher
  • A symmetrical triangle broke to the upside on 6-minute charts; the 61.8% extension near 2847.50 is achieved
  • Odds are an up day – watch for break below 2836.25 for change of fortunes
  • Key economic data due:
    • Unemployment Claims (233K vs. 23K est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly lower – Seoul was up
  • European markets are higher
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Gold
    • Silver
    • Copper
    • Platinum
    • Sugar
    • Coffee
    • Cotton
    • Cocoa
    • Palladium
  • Bonds
    • 10-yrs yield closed at 2.654% up from January 23 close of 2.624%;
    • 30-years closed at 2.937% up from 2.902%
    • 2-years yield is at 2.076% up  from 2.060%
    • The 10-Year-&-2-Year spread is at 0.574 up from 0.564

Key Levels:

  • Critical support levels for S&P 500 are 2824.81, 2821.22 and 2815.90
  • Critical resistance levels for S&P 500 are 2843.84, 2852.97 and 2855.60
  • Key levels for eMini futures: break above 2851.50, the high of 11:00 AM on January 24 and break below 2836.25, the low of 3:00 AM

Pre-Open

  • On Wednesday, at 4:00 PM, S&P future (March contract) closed at 2839.25 and the index closed at 2837.54 – a spread of about +1.25 points; futures closed at 2841.00 for the day; the fair value is -1.75
  • Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up by +8.25; Dow by +102.00; and NASDAQ by +44.00

Directional Bias Before Open

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

The trend and patterns on various time frames for S&P 500 are:

Monthly
  • Confirmed Uptrend
  • December 2017 closed higher; index has been higher for the nine straight months; it has only one down month, March 2017, since October 2016
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2%
Weekly:
  • The week ending on January 19 was a small body green candle, a hammer with almost no upper shadow but large lower shadow; the  weekly change was a healthy +0.9% but lower than previous two weeks’ +.26% and +1.6%
  • Last week’s pivot point 2796.42; R1=2824.021 R2=2838.11; S1=2782.52, S2=2754.73; 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 near 2687.41 is achieved; the 100% extension target is near 2913.13
  • 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 near 2704.63 is achieved; the 261.8% extension target is near 3088.34
  • 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
  • Confirmed Uptrend
  • Last big pattern, a down-sloping flag in June 2017, was broken to the upside on July 13, 2017; in August the index declined and tested the broken upper limit of the flag; since then the index has made three very small flags; it broke to the upside of the last flag on January 2
  • Above 20-day EMA but above 50-day EMA; Above 100-day SMA and 200-day SMA
2-Hour (e-mini future)
  • Broke above an Ascending triangle at 8:00 AM on January 22; Low=2769.25, High=2808.50; 100% extension near 2847.75 is achieved in early morning; 161.8% extension target is near 2872.00
  • RSI-9 divergence could still happen; at 6:00 PM on January 14 the price made a high of 2787.50 and RSI was 90.39; at 4:00 AM on January 16, the price made a high of 2803.50 but the RSI was at 85.63; at 2:00 AM on January 23, the price made 2842.00 and RSI was at 90.04;
  • RSI approaching a down trend line; break above would be bullish for price to follow
  • Sequence of higher highs and higher lows since 10:00 AM on November 2 and since August 29 with few exceptions; under pressure
  • Above rising 20-bar EMA, which is above rising EMA10 of EMA50
  • Bias: Up
30-Minute (e-mini future)
  • The symmetrical triangle formed on January 23 petered out after reaching 2855.25 between 61.8% and 100% extension targets
  • Last pattern bullish ABCD or symmetric triangle broke to the upside on January 22; 161.8% extension target near 2838.50 is achieved; 261.8% extension target is near 2867.50
  • RSI-14 twice bounced off 50 since 1:00 PM on January 24; RSI above 65
  • Above 20-bar EMA, which is above  EMA10 of EMA50
  • Bias: Up
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is sloping sideways since 10:00 AM on January 22
  • The band contracted during most of the Asian session; expansion since 3:15 AM with price hugging the upper band
  • MFI-14 is above 80
  • The Stochastic (9, 1, 3):  %K stayed above 80 from 3:15 AM to 7:15 AM; it is just near 65
  • Bias: Up

Previous Session

Major U.S. indices closed mostly down on Wednesday January 24. Dow Jones Industrial Average and NYSE Composite were up by +0.2%. The market gapped up at the open and then made all time highs. Indices then gave that up and went down by almost the similar margin. Near the end they recovered a part of the losses. A break below Wednesday’s low will be quite bearish and break above the high will be quite bullish.

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