Morning Notes – Thursday January 11, 2018

Directional Bias For The Day:

  • S&P Futures are higher; moving up since 5:30 AM on January 10
  • At 78.6% Fibonacci retracement level of the decline on January 9 & 10
  • Odds are for an up day – watch for break below 2747.75 for change of fortunes
  • Key economic data due:
    • PPI (-0.1% vs. 0.2% est.) and Core PPI (-0.1% vs. 0.2% est.) at 8:30 AM
    • Unemployment Claims (261K vs. 246K est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Hong Kong and Mumbai closed up; Tokyo, Sydney and Seoul were down
  • European markets are mostly down – Spain and Italy are up
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • Dollar index
    • USD/CHF
    • USD/CAD
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Gold
    • Copper
    • Platinum
    • Cotton
    • Silver
    • Palladium
    • Sugar
    • Coffee
    • Cocoa
  • Bonds
    • 10-yrs yield is at 2.564% up from January 10 close of 2.550%;
    • 30-years is at 2.909% up from 2.891%
    • 2-years yield is at 1.973% up from 1.977%
    • The 10-Year-&-2-Year spread is at 0.591 up from 0.573

Key Levels:

  • Critical support levels for S&P 500 are 2736.06, 2727.92 and 2719.07
  • Critical resistance levels for S&P 500 are 2750.80, 2759.14 and 2768.74
  • Key levels for eMini futures: break above 2756.50, the high of 7:00 AM and break below 2750.75, the low of 5:30 AM

Pre-Open

  • On Wednesday, at 4:00 PM, S&P future (March contract) closed at 2748.75 and the index closed at 2748.23 – a spread of about +0.50 points; futures closed at 2750.50 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 +4.25; Dow by +36.00; and NASDAQ by +11.75

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Up-to-Side
  • 30-Min: Up-to-Side
  • 15-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 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 doji candle with small lower shadow and smaller upper shadow; a break below will form a 3-day evening star pattern; a break above will resume the uptrend
  • RSI-14 divergence is nullifying as RSI is almost at the 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; 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
  • Pivot Point=2745.03; R1=2754.00, R2=2759.77; S1=2739.26; S2=2730.29; S1/S2 were breached
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Futures are moving higher since 4:00 PM on December 29 in steps; regaining that trend after drifting down from 12:00 PM on January 9 to 4:00 AM January 10; forming a broad v shaped pattern
  • 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 rising 20-bar EMA, which is above rising 50-bar EMA
30-Minute (e-mini future)
  • Moving up since 5:30 AM on January 10; near the highs made on January 9; rounded pattern that is sharp at the lowest end
  • Emerging head-&-shoulder pattern seems to fizzle out
  • RSI-14 declined from a high of 73.3 at 2:00 PM on January 9 to a low of 24.14 at 5:30 AM on January 10; it is rising since then and is just below 65; a break above will re-assert the up trend
  • Above rising 20-bar EMA, which is above rising 50-bar EMA
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) has been moving up 10:45 AM on January 10
  • The band contracted from 3:15 AM to 6:45 AM;  BW dipped below 0.10 at 3:15 AM and came above it at 7:00 AM
  •  during the Asian session and started to expand at 2:15 AM; price was hugging the lower band till 7:00 AM
  • MFI-14 declined from a high of 96.12 at 7:45 PM on January 10 to 26.53 at 5:15 AM with once bounce that found resistance at 80; it is ris1ng since 5:15 AM and is just above 50
  • The Stochastic (9, 1, 3): %K declined to 7.14 at 5:15 AM the rose to 100 at 6:15 AM; it made a divergence at 7:15 AM and now has fallen near 50

Previous Session

Most major U.S. indices declined on Wednesday January 10. Dow Jones Transportation Average was up. Market opened lower and then mostly rose through the day. They declined slightly near the end. Most made a doji like candle with smaller upper shadow

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

 

Print Friendly, PDF & Email