Morning Notes – Friday April 27, 2018

Directional Bias For The Day:

  • S&P Futures are lower but higher from NYSE close; moving sideways since 9:30 PM
  • Breaking above a horizontal channel on 6-minute chart; the 61.8% extension target is near 2675.00 and 100% extension target is near 2678.25
  • Odds are for an up to sideways move – watch for break above 2677.50 and below 2666.00 for change of fortune
  • Key economic data due
    • Advance GDP (2.3% vs. 2.0% est. ) at 8:30 AM
    • Advance GDP Price Index (2.0% vs. 2.2% est.) at 8:30 AM
    • Employment Cost Index (0.8% vs. 0.7% est.) 209K vs. 230K est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed higher
  • European markets are mostly higher – Italy and Switzerland are down
  • Currencies:
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • USD/INR
  • Commodities:
    Up Down
    • Gold
    • Coffee
    • Cotton
    • Crude Oil
    • NatGas
    • Silver
    • Copper
    • Platinum
    • Palladium
    • Sugar
    • Cocoa
  • Bonds
    • 10-yrs yield closed at 2.990%, down from April 25 close of 3.024%;
    • 30-years is at 3.175%, down from 3.209%
    • 2-years yield is at 2.488%, down from 2.491%
    • The 10-Year-&-2-Year spread is at 0.506, down from 0.533

Key Levels:

  • Critical support levels for S&P 500 are 2653.97, 2647.16 and 2631.08
  • Critical resistance levels for S&P 500 are 2676.48, 2683.55 and 2698.79
  • Key levels for eMini futures: break above 2671.50, the high at 3:00 AM and break below 2665.25, the low of 5:00 AM

Pre-Open

  • On Thursday, at 4:00 PM, S&P future (June contract) closed at 2666.25 and the index closed at 2666.94 – a spread of about +0.50 points; futures closed at 2674.50 for the day; the fair value is -8.25
  • Pre-NYSE session open, futures price action is mixed – at 8:30 AM, S&P 500 futures were down by -2.50; Dow down by -53.00; and NASDAQ up by +30.50

Directional Bias Before Open

  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend Under Pressure
  • 120-Min: Side-Down
  • 30-Min: Up-Side
  • 15-Min: Up-Side
  • 6-Min: 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 large green candle that gapped up at the open and did not close the gap; small lower shadow and larger upper shadow; three-day morning star pattern
  • Back within a symmetrical triangle after breaching its lower bound
  • Stochastic (13, 2, 3) is declining after making a divergence on April 18; %K attempting to cross over %D
  • At/blow 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; rising since 10:00 AM on April 25; trying to break above a downtrend line from April 18 high;
  • 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; moving along 65 since 8:00 PM on April 26
  • Above 20-bar EMA, which is crossing above 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; moving sideways since 9:30 PM on April 26
  • The sequence of lower lows and lower highs since 11:00 AM on April 18 broke; an uptrend line from the lows of April 25 is broken by a sideway move
  • RSI is declining from 73.73 at 2:30 PM on April 26 but mostly staying above 50
  • At/above 20-bar EMA, which is above 50-bar EMA
  • Bias: Up-Side
15-Minute (e-mini future)
  • Breaking above a downtrend line from 4:30 PM high on April 26
  • Bollinger Band (20, 2.0) is mostly moving sideways since 6:30 PM on April 26
  • The band is mostly narrow since 10:45 PM on April 26
  • RSI trended down from 2:30 PM on April 25 from 65 to 40 by 5:15 AM; it is rising since
  • 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 5:00 AM to above 70
  • Bias: Up-Side

Previous Session

Most major U.S. indices advanced on Thursday April 26 in largely lower volume. Only Dow Jones Transportation Average declined in increased volume. Most also three-day morning star pattern. Most also gapped up on open and did not fill the gap.

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

 

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