Market Remarks

Morning Notes – Wednesday April 25, 2018

Directional Bias For The Day:

  • S&P Futures are lower; moving within a symmetrical triangle on 30-minute timeframe;
  • Down bias on daily and lower degree timeframes
  • Odds are for a bounce with increased volatility – watch for break above 2637.00 and below 2618.00 for more clarity
  • No key economic data due

Markets Around The World

  • Markets in the East closed lower – Sydney was closed
  • European markets are lower
  • Currencies:
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • USD/INR
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
  • Commodities:
    Up Down
    • NatGas
    • Copper
    • Cotton
    • Crude Oil
    • Gold
    • Silver
    • Platinum
    • Palladium
    • Sugar
    • Coffee
    • Cocoa
  • Bonds
    • 10-yrs yield closed at 2.983% on April 24, up from April 23 close of 2.973%;
    • 30-years is at 3.168%, up from 3.144%
    • 2-years yield is at 2.491%, up from 2.439%
    • The 10-Year-&-2-Year spread is at 0.504, up from 0.499

Key Levels:

  • Critical support levels for S&P 500 are 2617.32, 2610.79 and 2586.27
  • Critical resistance levels for S&P 500 are 2637.05, 2644.73 and 2657.99
  • Key levels for eMini futures: break above 2637.00, the high at 3:30 AM and break below 2618.25, the low of 7:00 AM

Pre-Open

  • On Tuesday, at 4:00 PM, S&P future (June contract) closed at 2633.75 and the index closed at 2634.56 – a spread of about +0.75 points; futures closed at 2635.25 for the day; the fair value is -1.50
  • Pre-NYSE session open, futures price action is mixed – at 8:15 AM, S&P 500 futures were down by -6.50; Dow up by +20.00; and NASDAQ down by -20.75

Directional Bias Before Open

  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend Under Pressure
  • 120-Min: Side-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 April 20 was a doji, almost like a shooting star;
  • Last week’s pivot point=2649.12, R1=2687.44, R2=2718.59; S1=2617.97, S2=2579.65; R1 pivot levels was breached;
  • An up week; third in last five weeks and sixth in last ten weeks
  • A bearish ABCD pattern is emerging; break below 2553.80 would open up potential down targets near 2461.75 and 2251.50 levels
  • 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; Last swing high, 2872.87, was during the week of January 22, 2-018; the low since the last swing high is 2532.69 during the week if February 5, 2018
  • Below 10-week EMA; at 39-week SMA and above 89-week SMA
  • Uptrend under pressure
Daily
  • A large red candle with almost no upper shadow and a lower shadow that less than one third of the real body
  • At the lower bound of a symmetrical triangle
  • Stochastic (13, 2, 3) is declining after making a divergence on April 18
  • Below 20-day EMA, which is below 50-day EMA 100-day SMA; above 200-day SMA
  • Uptrend under pressure
2-Hour (e-mini future)
  • Declining since 8:00 Am on April 18 in steps; lower lows and lower highs; breaking below an uptrend line from April 2 lows; started another down turn at 8:00 PM on April 24 after a small bounce
  • RSI-9 falling since 6:00 AM on April 24 from a high of 68.35; at 25
  • Below 20-bar EMA, which is below EMA10 of EMA50
  • Bias: Side-Down
30-Minute (e-mini future)
  • Broke below a horizontal channel at 12:00 PM on April 24; achieved most extension targets
  • Lower lows and lower highs since 11:00 AM on April 18; below a downtrend line; forming a symmetrical triangle at the low end
  • RSI is rising from 11.96 at 2:00 PM on April 24 but still below 40
  • Below 20-bar EMA, which is below 50-bar EMA
  • Bias: Down
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is sloping down since 9:30 PM on April 24 following s short bounce after a big decline
  • The band is mostly narrow since 9:30 PM
  • RSI is mostly below 50 since 9:00 AM on April 24
  • The Stochastic (9, 1, 3): %K is crossing above %D after making a divergence
  • Bias: Down-Side

Previous Session

Major U.S. indices closed down on Tuesday April 24 in increased volume. All made large red candle with almost no upper shadow and a lower shadow that was less half the size of the real body.

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

 

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