Market Remarks

Morning Notes – Wednesday January 24, 2018

Directional Bias For The Day:

  • S&P Futures are higher
  • A descending triangle broke to the upside on 161.8% extension near 2850.25 is achieved
  • Odds are an up day – watch for break below 2843.00 for change of fortunes
  • Key economic data due:
    • Existing Home Sales (est. 5.72M) at 10:00 AM

Markets Around The World

  • Markets in the East closed mostly higher – Tokyo was down
  • European markets are mostly lower – Switzerland is up
  • 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
    • Palladium
    • Coffee
    • Cocoa
    • Sugar
    • Cotton
  • Bonds
    • 10-yrs yield is at 2.650% up from January 23 close of 2.624%;
    • 30-years is at 2.937% up from 2.902%
    • 2-years yield is at 2.068% up  from 2.060%
    • The 10-Year-&-2-Year spread is at 0.582 up from 0.564

Key Levels:

  • Critical support levels for S&P 500 are 2834.99, 2821.22 and 2815.90
  • Critical resistance levels for S&P 500 are 2844.05, 2848.72 and 2855.70
  • Key levels for eMini futures: break above 2850.25, the high of 8:30 AM and break below 2843.00, the low of 7:00 AM

Pre-Open

  • On Tuesday, at 4:00 PM, S&P future (March contract) closed at 2840.50 and the index closed at 2839.13 – a spread of about +1.25 points; futures closed at 2839.50 for the day; the fair value is +1.00
  • Pre-NYSE session open, futures price action is to the upside – at 9:15 AM, S&P 500 futures were up by +9.00; Dow up by +107.00; and NASDAQ up by +23.00

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Up
  • 30-Min: Up
  • 15-Min: Side-to-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
  • Small green body with small upper and lower shadows following a large green candle
  • 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 has declined to 71.02 in steps but price is at new high
  • 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)
  • A symmetrical triangle formed on January 23 and broke to the upside on January 24; High=2844.75 and Low=2828.75; 61.8% extension target is near 2851.75 and 100% extension target is near 2858.00
  • 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 rising since 6:00 AM on January 23; RSI above an uptrend line
  • Above 20-bar EMA, which is above  EMA10 of EMA50
  • Bias: Up
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is sloping up since 9:15 AM on January 22 after a brief sideways move during Asian session
  • The band contracted during most of the Asian session; then expanded to the upside; then narrowed sideways; and is again expanding to the upside with price hugging the upper band
  • MFI-14 is staying above 50 after couple of bounces off its since midnight
  • The Stochastic (9, 1, 3): Trending dup after %K made 0 at 6:45 AM; above 90 after a knee to the upside
  • Made an evening star between 8:15 and 9:00 AM; 9:154 AM could be a bullish engulfing
  • Bias: Up

Previous Session

Most major U.S. indices advanced on Tuesday January 23. Dow Jones Industrial Average and Dow Jones Transportation Average declined. Indices traded within a narrow range. DJIA volume increased by +0.5%

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

 

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