Market Remarks

Morning Notes – Wednesday May 30, 2018

Directional Bias For The Day:

  • S&P Futures are higher; rising since 3:00 PM on May 9 in an up-sloping flag on 30-minute chart
  • Odds are for an up to sideways day with increased volatility – watch for break above 2707.75 and break below 2695.00 for more clarity
  • Key economic data due:
    • Prelim GDP ( 2.2% vs. 2.3% est.) at 8:30 AM
    • Beige Book at 2:00 PM

Markets Around The World

  • Markets in the East were down
  • European markets are mostly up – France and Switzerland are down
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • Dollar index
    • USD/CHF
    • USD/CAD
    • USD/INR
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Gold
    • Silver
    • Platinum
    • Palladium
    • Coffee
    • Cocoa
    • Copper
    • Sugar
    • Cotton
  • Bonds
    • 10-yrs yield closed at 2.786% on May 29, down from May 25 close of 2.931%;
    • 30-years is at 2.968%, down from 3.090%
    • 2-years yield is at 2.383%, down from 2.516%
    • The 10-Year-&-2-Year spread is at 0.441, up from 0.415

Key Levels:

  • Critical support levels for S&P 500 are 2676.81. 2655.20 and.2640.04
  • Critical resistance levels for S&P 500 are 2710.67, 2722.68 and 2727.36
  • Key levels for eMini futures: break above 2707.75, the high of 7:00 AM and break below 2695.00, the low of 4:30 AM

Pre-Open

  • On Tuesday, at 4:00 PM, S&P future (June contract) closed at 2688.50 and the index closed at 2689.86- a spread of about -1.25 points; futures closed at 2692.25 for the day; the fair value is -3.75
  • Pre-NYSE session open, futures price action is to the upside – at 7:45 AM, S&P 500 futures were up by +13.25; Dow by +147.00; and NASDAQ by+28.00

Directional Bias Before Open

  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend resumed
  • 120-Min: Side-Down
  • 30-Min: Down-Side
  • 15-Min: Side-Up
  • 6-Min: Up

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 May 18 was a small red spinning top candlestick, which was also a harami candle just above the upper limit of a symmetrical triangle
  • Last week’s pivot point=2723.65, R1=2739.92, R2=2758.51; S1=2705.06, S2=2688.79; R1 pivot level was breached;
  • An up week; second in last five weeks and fifth in last ten weeks
  • 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 gapped down at the open; upper shadow smaller than the lower shadow; the low for the day was just above the lower limit of a symmetrical triangle that was broken to the upside on May10;
  • Below 20-day EMA; at 50-day EMA and 100-day SMA; above 200-day SMA
  • Uptrend resumes
2-Hour (e-mini future)
  • The break below a horizontal channel achieved the 61.8% extension target near 2675.00 and then bounced back up to the lower limit of the channel; breaking above the lower limit
  • Uptrend since 10:00 AM on May 3 with sequence of higher highs and higher lows has broken
  • RSI-9 made double bottom near 18.6 with price lower at second bottom; bounce up above 50 and approaching 65;
  • At 20-bar EMA, which is below EMA10 of EMA50
  • Bias: Side-Down
30-Minute (e-mini future)
  • Bouncing up from a low 2675.00 at 3:00 PM on May 29; forming an up-sloping flag
  • RSI rising from a low of 17.04 at 5:00 AM on May 29; made a bullish divergence at 3:00 PM; rose above 65 at 6:30 AM
  • Above 20-bar EMA, which is breaking above 50-bar EMA
  • Bias: Down-Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is sloping up since 4:30 PM on May 29
  • The band was narrow during Monday, which was Memorial Day holiday; expanding since 1:45 AM with price hugging the lower limit
  • RSI mostly between 40 and 65 since 3:15 PM on May 29; moving along 5 since 6:00 AM
  • The Stochastic (9, 1, 3): %K crossed above %D at 4:45 AM from below 20; above 70
  • Bias: Side-Up

Previous Session

Major U.S. indices closed lower on Tuesday May 29, the first day after the three-day weekend. The volume was mostly high. Volume was lower on Dow Jones Transportation Average closed higher and the volume on DJT was higher too.

  • S&P 500 Sectors
Up Down
  1. Utility (Unch.)
  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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