Morning Notes – Thursday April 26, 2018

Directional Bias For The Day:

  • S&P Futures are higher; moving higher since 9:45 AM on April 25; new leg up since 3:00 AM
  • Forming a rounding bottom pattern on 30-min timeframe
  • Odds are for a bounce from recent lows with increased volatility – watch for break above 2655.00 and below 2647.00 for more clarity
  • Key economic data due
    • ECB Press Conference at 8:30 AM
    • Core Durable Goods (0.0% vs. 0.,5% est.) at 8:30 AM
    • Durable Good Orders (2.6% vs. 1.6% est.) at 8:30 AM
    • Unemployment Claims (209K vs. 230K est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Hong Kong and Sydney were down; Tokyo, Mumbai and Seoul were up
  • European markets are higher
  • Currencies:
    Up Down
    • Dollar index
    • EUR/USD
    • GBP/USD
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • USD/JPY
    • USD/INR
  • Commodities:
    Up Down
    • Crude Oil
    • Gold
    • Palladium
    • Sugar
    • Coffee
    • Cotton
    • Cocoa
    • NatGas
    • Silver
    • Copper
    • Platinum
  • Bonds
    • 10-yrs yield is at 2.992%, down from April 25 close of 3.024%;
    • 30-years is at 3.176%, down from 3.209%
    • 2-years yield is at 2.483%, down from 2.491%
    • The 10-Year-&-2-Year spread is at 0.509, down from 0.533

Key Levels:

  • Critical support levels for S&P 500 are 2631.08, 2621.37 and 2612.67
  • Critical resistance levels for S&P 500 are 2645.30, 2657.99 and 2683.55
  • Key levels for eMini futures: break above 2654.25, the high at 7:30 AM and break below 2639.50, the low of 3:00 AM

Pre-Open

  • On Wednesday, at 4:00 PM, S&P future (June contract) closed at 2638.75 and the index closed at 2639.40 – a spread of about +0.75 points; futures closed at 2644.50 for the day; the fair value is -5.75
  • Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up +8.50; Dow by +61.00; and NASDAQ by +48.50

Directional Bias Before Open

  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend Under Pressure
  • 120-Min: Side-Down
  • 30-Min: Down-Side
  • 15-Min: Side-Up
  • 6-Min: Up-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 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 relatively small green real body with smaller upper shadow and very large lower shadow
  • Back within a symmetrical triangle after breaching its lower bound
  • 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)
  • Downtrend since 8:00 Am on April 18; lower lows and lower highs; below a downtrend line from April 18 high; rising since 10:00 AM on April;25
  • Break below an uptrend line from April 2 lows did not last and price is back above it
  • RSI-9 mostly rising since 14:00 PM on April 24 from a low of 16.28; above 50
  • At/above20-bar EMA, which is below EMA10 of EMA50
  • Bias: Side-Down
30-Minute (e-mini future)
  • Broke above a down-sloping flag at 1:30 Pm on April 25; rising since 10:00 AM on April 25; forming a cup-with-handle pattern; approaching a resistance level at 2657.00
  • The sequence of lower lows and lower highs since 11:00 AM on April 18 broke
  • RSI is rising from 11.96 at 2:00 PM on April 24; between 40 and 65 since 8:00 Am on April 25; above 50
  • Above 20-bar EMA, which is above 50-bar EMA
  • Bias: Down-Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is mostly moving sideways since 9:45 PM on April 24; trended up from 10:30 AM on April 25 to 10:45 PM and since then is slightly trending down
  • The band is mostly narrow since 9:30 PM on April 25
  • RSI is mostly above 40 since 10:15 AM on April 25; rising since 3:00 from a low of 40.61; above 50
  • The Stochastic (9, 1, 3): %K is moving up since 2:15 AM from a below 20 and is crisscrossing %D; above 80
  • Bias: Side-Up

Previous Session

Major U.S. indices were mixed on Wednesday April 25 in largely lower volume. NASDAQ Composite and Russell 2000 declined and others advanced. Only Dow Jones Transportation Average saw increased volume. Most also made doji like patter with very small upper shadows and larger lower shadows.

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

 

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