Market Remarks

Morning Notes – Tuesday January 9, 2018

Directional Bias For The Day:

  • S&P Futures are higher; moved sideways from 1:30 PM on January 8 to 7:30 AM
  • Odds are for an up day – watch for break below 2742.75 for change of fortunes
  • No Key economic data due:

Markets Around The World

  • Markets in the East closed mostly higher – Seoul was lower
  • European markets are up
  •  Currencies:
    Up Down
    • Dollar index
    • USD/CHF
    • NZD/USD
    • USD/CAD
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Copper
    • Palladium
    • Cocoa
    • Gold
    • Silver
    • Platinum
    • Sugar
    • Coffee
    • Cotton
  • Bonds
    • 10-yrs yield is at 2.496% up from January 8 close of 2.480%;
    • 30-years is at 2.843% up from 2.814%
    • 2-years yield is at 1.960% down from 1.964%
    • The 10-Year-&-2-Year spread is at 0.536 up from 0.516

Key Levels:

  • Critical support levels for S&P 500 are 2737.60, 2727.92 and 2719.07
  • Critical resistance levels for S&P 500 are 2751.61, 2755.52 and 2762.52
  • Key levels for eMini futures: break above 2749.00, the high of 4:00 AM and break below 2746.50, the low of 6:30 AM

Pre-Open

  • On Monday, at 4:00 PM, S&P future (March contract) closed at 2746.50 and the index closed at 2747.71 – a spread of about -1.25 points; futures closed at 2746.75 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up by +4.50; Dow by +65.00; and NASDAQ by +15.50

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
  • 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 5 was a large green candle with almost no upper and lower shadows; the change was +2.6%, which is the largest change since the week closing on November 11 2016, almost thirteen months ago
  • Last week’s pivot point 2722.99; R1=2763.61, R2=2784.08; S1=2702.52, S2=2661.90; R1/R2/R3 were breached; last all 3 resistance levels were breached was the week closing on December 1 and following week ne pivot levels were breached
  • An up week;  fourth in last five weeks and seventh 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
  • A green real body candle that closed near the high; small lower shadow
  • RSI-14 divergence is nullifying as RSI is very close to previous high
  • 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=2744.61; R1=2751.61, R2=2755.52; S1=2740.70; S2=2733.70; R1 was breached
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Futures are moving higher since 4:00 PM on December 29 in steps; drifting mostly sideways since 6:00 PM on Sunday
  • Broke above a horizontal channel on January 3; the 161.8% Fib extension target near 2729.50 was achieved; the 261.8% extension target near 2747.75 was achieved on January 7
  • Sequence of higher highs and higher lows since 10:00 AM on November 2 and since August 29 with few exceptions; reasserted on January 3;
  • Above 20-bar EMA, which is above 50-bar EMA
30-Minute (e-mini future)
  • Moving sideways since 6:30 PM on January 7;
  • Broke above an ascending triangle on January 4; the 100% Fib extension target near 2728.75 was achieved; the 161.8% Fib extension target near 2747.50 was achieved; the 261.8% extension target is near 2778.00
  • Broke above a symmetrical triangle / pennant at early Asian session; the 100% extension triangle break target is near 2733.00 and 161.8% extension target is near 2737.75; the Flag/pennant break targets are near 2742.00 and 2755.00
  • RSI-14 crossed below 40 on January 8 and then rebounded just above 65; it is hovering around 65 since 3:30 AM
  • At/above 20-bar EMA, which is above 50-bar EMA
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) has been moving sideways 6:00 PM on January 7
  • The band contracted during the Asian session and started to expand during early European session; it is contracting since 7:00 AM
  • MFI-14 rose to 95 at 4:00; it declined from that level but is finding support just above 50
  • The Stochastic (9, 1, 3): %K bounced off 20 at 6:30 AM; made a high of 100 at 1007:45 AM; now crossing below %D at 8:00 AM

Previous Session

Major U.S. indices closed higher on Monday January 8. Market opened lower but then moved up and closed near the highs. Major indices made all time highs.

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

 

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