Morning Notes – Wednesday May 2, 2018

Directional Bias For The Day:

  • S&P Futures are lower; moving within a range between 2658.50 and 2646.25 since NYSE session close
  • Market is waiting for FOMC Statement and Rate decision at 2:00 PM
  • Odds are for a sideways to down move – watch for break above 2658.50 and below 2646.25 for change of fortune
  • Key economic data due
    • ADP Non-Farm Employment Change (204K vs. 200K est.) at 8:15 AM

Markets Around The World

  • Markets in the East were mixed – Shanghai, Hong Kong, Tokyo and Seoul were down; Sydney and Mumbai were up
  • European markets are mostly higher – Switzerland is down
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • USD/INR
  • Commodities:
    Up Down
    • Crude Oil
    • Gold
    • Silver
    • Copper
    • Platinum
    • Palladium
    • Coffee
    • Cotton
    • NatGas
    • Sugar
    • Cocoa
  • Bonds
    • 10-yrs yield is at 2.978%, up from May 1 close of 2.976%;
    • 30-years is at 3.139%, up from 3.137%
    • 2-years yield is at 2.500%, down from 2.508%
    • The 10-Year-&-2-Year spread is at 0.478, up from 0.468

Key Levels:

  • Critical support levels for S&P 500 are 2641.85, 2625.41 and 2621.37
  • Critical resistance levels for S&P 500 are 2660.09, 2665.91 and 2682.92
  • Key levels for eMini futures: break above 2658.50, the high at 5:00 AM and break below 2646.25, the low of 10:00 PM

Pre-Open

  • On Tuesday, at 4:00 PM, S&P future (June contract) closed at 2651.75 and the index closed at 2654.80 – a spread of about -3.00 points; futures closed at 2652.25 for the day; the fair value is -0.50
  • Pre-NYSE session open, futures price action is, mostly, to the downside – at 8:45 AM, S&P 500 futures were down by -3.00; Dow by -42.00; and NASDAQ is up by +3.75

Directional Bias Before Open

  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend Under Pressure
  • 120-Min: Down
  • 30-Min: Down-Side
  • 15-Min: Down-Side
  • 6-Min: Side-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 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 green hammer at the lower bound of a symmetrical triangle
  • Below 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)
  • Rising since 12:00 PM on May 1; bouncing off 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 rising since 10:00 AM on May 1 after making a low of 19.32; bounced off 50 at 8:00 PM
  • At/above 20-bar EMA, which is below EMA10 of EMA50
  • Bias: Side-Down
30-Minute (e-mini future)
  • Rising since 1:00 PM on May 1 from a low of 2623.25 to above 2650.00
  • RSI is rising since 11:30 AM and made a divergence at the day’s low; above 50
  • At/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 11:00 PM on May 1;
  • The band narrowed during Asian session, moving sideways, and then moving up but still narrow
  • RSI moving between 40 and 65 since 1:30 PM on May 1
  • The Stochastic (9, 1, 3): %K crossed above %D at 6:30 AM after dipping below 20
  • Bias: Down-Side

Previous Session

Major U.S. indices were mixed on Tuesday May 1 in mixed volume. Most indices made either a hammer of dragonfly doji. NASDAQ Composite formed a bullish engulfing.

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