Market Remarks

Morning Notes – Friday March 2, 2018

Directional Bias For The Day:

  • S&P Futures are lower; moving lower since 3:30 AM
  • Broke below a symmetrical triangle, bearish sign, on 30-minute chart at 4:00 AM
  • Odds are for a down day with greater volatility – watch for break above 2668.00 for a change of fortunes
  • Key economic data:
    • Revised UoM Consumer Sentiment ( est. 99.4) at 10:00 AM

Markets Around The World

  • Markets in the East were down – Mumbai was closed
  • European markets are lower
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/CAD
    • Dollar index
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
  • Commodities:
    Up Down
    • NatGas
    • Gold
    • Silver
    • Copper
    • Platinum
    • Palladium
    • Sugar
    • Cotton
    • Crude Oil
    • Coffee
    • Cocoa
  • Bonds
    • 10-yrs yield closed at 2.804% on March 1 down from February 28 close of 2.908%;
    • 30-years closed at 3.088%, down from 3.127%
    • 2-years yield is at 2.230%, up from 2.210%
    • The 10-Year-&-2-Year spread is at 0.594 down from 0.618

Key Levels:

  • Critical support levels for S&P 500 are 2659.65, 2648.87 and 2637.08
  • Critical resistance levels for S&P 500 are 2689.00, 2697.77 and 2721.72
  • Key levels for eMini futures: break above 2668.00, the high of 7:00 AM and break below 2652.75, the low of 8:00 AM

Pre-Open

  • On Thursday, at 4:00 PM, S&P future (March contract) closed at 2676.00 and the index closed at 2677.67 – a spread of about -1.75 points; futures closed at 2678.25 for the day; the fair value is -2.25
  • Pre-NYSE session open, futures price action is to the downside – at 8:15 AM, S&P 500 futures were down by -22.50; Dow by -277.00; and NASDAQ by -87.50

Directional Bias Before Open

  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend Under Pressure
  • 120-Min: Down
  • 30-Min: Down
  • 15-Min: Down-Side
  • 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 February 23 was a small green candle with almost no upper shadow and small lower shadow following a large green bodied candle with +4.3% advance, which had followed a -5.2% decline previous week
  • Last week’s pivot point=2730.94, R1=2764.12, R2=2780.93; S1=2714.13, S2=2680.95; no pivot levels were breached;
  • An up week; two in a row, third 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
  • Below 10-week EMA; at 39-week SMA and above 89-week SMA
  • Uptrend under pressure
Daily
  • A large red candle with small upper and lower shadows
  • 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
  • Bounced off 200-day SMA on February 9
  • Below 20-day EMA and 50-day EMA; above 100-day SMA and 200-day SMA
  • Uptrend under pressure
2-Hour (e-mini future)
  • Broke below a support on March 1; a small bounce was turned back at the broken-support-turned-resistance
  • RSI-9 mostly fluctuating between 25 and 40 since 12:00 PM on February 28
  • Below 20-bar EMA, which is below EMA10 of EMA50
  • Bias: Down
30-Minute (e-mini future)
  • Broke below a symmetrical triangle or a pennant at 4:00 AM; 00% extension target near 2653.00 is achieved
  • RSI below a downtrend line since February 26; mostly below 50 since 10:30 AM on February 2
  • Below 20-bar EMA which is below 50-bar EMA
  • Bias: Down
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving sideways with a down bias since 7:30 PM on Thursday
  • The band contracted from 7:30 PM to 3:45 AM and is expanding since then
  • RSI is mostly between 50and 25 since 12:00 PM on Thursday
  • The Stochastic (9, 1, 3): %K is making a bullish divergence at 8:00 AM
  • Bias: Down-Side

Previous Session

Major U.S. indices declined on Thursday March 1 and have broken below the lows of the congestion area made between February 15 and February 23.

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

 

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