Morning Notes – Tuesday May 1, 2018

Directional Bias For The Day:

  • S&P Futures are lower; moving lower since 10:00 AM on April 30
  • Odds are for a down to sideways move – watch for break above 2650.00 and below 2640.00 for change of fortune
  • Key economic data due
    • ISM Manufacturing (est. 58.4) at 10:00 AM

Markets Around The World

  • Markets in the East were higher or closer- Tokyo and Sydney were up and rest were closed due to May 1st Labor Day
  • European markets are mostly higher or closed – U.K. and STOXX 600 are up; rest are closed
  • Currencies:
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • USD/INR
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
  • Commodities:
    Up Down
    • Gold
    • Coffee
    • Cotton
    • Cocoa
    • Crude Oil
    • NatGas
    • Silver
    • Copper
    • Platinum
    • Palladium
    • Sugar
  • Bonds
    • 10-yrs yield is at 2.966%, up from April 30 close of 2.936%;
    • 30-years is at 3.132%, up from 3.097%
    • 2-years yield is at 2.492%, unchanged
    • The 10-Year-&-2-Year spread is at 0.472, down from 0.444

Key Levels:

  • Critical support levels for S&P 500 are 2647.16, 2631.08 and 2621.37
  • Critical resistance levels for S&P 500 are 2665.91, 2682.92 and 2698.79
  • Key levels for eMini futures: break above 2649.50, the high at 7:00 AM and break below 2640.75, the low of 9:00 AM

Pre-Open

  • On Monday, at 4:00 PM, S&P future (June contract) closed at 2646.50 and the index closed at 2648.05 – a spread of about -1.50 points; futures closed at 2647.00 for the day; the fair value is -0.50
  • Pre-NYSE session open, futures price action is to the downside – at 8:30 AM, S&P 500 futures were down by -0.50; Dow by -37.00; and NASDAQ by -4.25

Directional Bias Before Open

  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend Under Pressure
  • 120-Min: Down
  • 30-Min: Up-Side
  • 15-Min: Down-Side
  • 6-Min: Down-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 27 was a doji with very small upper shadow and very long lower shadow
  • Last week’s pivot point=2655.38, R1=2698.08, R2=2726.26; S1=2627.20, S2=2584.50; S1/S2 pivot levels were breached;
  • A down week; second in last five weeks and fifth in last ten weeks
  • A symmetrical triangle pattern is emerging; price in the middle of the pattern
  • 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 red candle that completely engulfed the previous day’s candle
  • At/bleow 20-day EMA, which is below 50-day EMA and 100-day SMA; above 200-day SMA
  • Uptrend under pressure
2-Hour (e-mini future)
  • Declining since 6:00 AM on April 30; at below the downtrend line from the high on April 18, which was broken to the upside once
  • Break below an uptrend line from April 2 lows did not last and price is back above it; price again below it
  • RSI-9 declining after making a divergence at 4:00 AM on April 30; rising from a low of 21.44 at 4:00 PM on April 30; just below 40
  • Below 20-bar EMA, which is below EMA10 of EMA50
  • Bias: Side-Down
30-Minute (e-mini future)
  • Declining since 6:00 AM on April 30; bouncing from a low of 2641.25 at 6:30 PM and made a near double bottom, near 2642.00, at 5:00 AM; interestingly poised; a break above 2648.75 will continue the bounce and a break below 2642.00 will resume the downtrend
  • RSI is rising from 17.20 at 6:30 PM on April 30; crossed above 40 but below 50
  • At/below 20-bar EMA, which is below 50-bar EMA
  • Bias: Up-Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is mostly moving sideways since 9:45 PM on April 30; near the bottom of the 3-day chart window
  • The band narrowed during Asian session, moving sideways, and then expanded, with down bias, during European session; narrowing since 7:45 AM
  • RSI trended up from low of 29.03 at 4:45 AM
  • The Stochastic (9, 1, 3): %K crossed above %D at 8:30 AM
  • Bias: Down-Side

Previous Session

Major U.S. indices declined on Monday April 30 in lower volume. NASDAQ Composite and Russell 2000 traded in less volume than on Friday. Most also made bearish engulfing candle or similar bearish candlestick line.

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

 

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