Morning Notes – Tuesday June 12, 2018

Directional Bias For The Day:

  • S&P Futures are higher; moving within a down-sloping flag since in a downtrend since 1:00 PM on June 11 on 30-minute chart; approaching the upper limit
  • Odds are for an up day – watch for break below 2782.25 for change of fortune
  • Key economic data due:
    • CPI (0.2% vs. 0.2% est.) at 8:30 AM
    • Core CPI (0.2% vs. 0.1% est.) at 8:30 AM

Markets Around The World

  • Markets in the East were mostly higher – Seoul was down
  • European markets are mixed – Germany, U.K., France and STOXX 600 are down; Spain, Italy and Switzerland are up
  • Currencies:
    Up Down
    • EUR/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • Dollar index
    • GBP/USD
    • USD/CHF
    • USD/INR
  • Commodities:
    Up Down
    • NatGas
    • Copper
    • Platinum
    • Palladium
    • Sugar
    • Coffee
    • Crude Oil
    • Gold
    • Silver
    • Cotton
    • Cocoa
  • Bonds
    • 10-yrs yield is at 2.977%, up from June 11 close of 2.957%;
    • 30-years is at 3.111%, up from 3.098%
    • 2-years yield is at 2.557%, up from 2.516%
    • The 10-Year-&-2-Year spread is at 0.420, down from 0.441

Key Levels:

  • Critical support levels for S&P 500 are 2780.17, 2771.78 and 2760.16
  • Critical resistance levels for S&P 500 are 2788.87, 2801.90 and 2808.92
  • Key levels for eMini futures: break above 2792.00, the high of 2:30 AM and break below 2782.25, the low of 7:00 AM

Pre-Open

  • On Monday, at 4:00 PM, S&P future (September contract) closed at 2786.25 and the index closed at 2782.00 – a spread of about +4.25 points; futures closed at 2786.75 for the day; the fair value is -0.50
  • Pre-NYSE session open, futures price action is to the upside  – at 8:45 AM, S&P 500 futures were up by +1.75; Dow by +6.00; and NASDAQ by +2.25

Directional Bias Before Open

  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend
  • 120-Min: Up-Side
  • 30-Min: Side-Down
  • 15-Min: 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 June 8 was large green candle that s breaking away from past few weeks congestion zone
  • Last week’s pivot point=2766.15, R1=2792.78, R2=2806.54; S1=2752.39, S2=2725.76; R1/R2 pivot levels were breached;
  • An up week; fourth in last five weeks and sixth 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
  • Above 10-week EMA; above 39-week SMA and above 89-week SMA
  • Uptrend under pressure
Daily
  • A small candle, almost like a gravestone doji, that gapped up at the open; break below its low of 2780.17, will be critical
  • Above 20-day EMA; above 50-day EMA and 100-day SMA; above 200-day SMA
  • Uptrend
2-Hour (e-mini future)
  • Break above a horizontal channel continues; the 100% extension target near 2782.00 is achieved; the 161.8% extension target is near 2807.00
  • RSI-9 declining since 12:00 PM on June 11 from above 70; around 50
  • At 20-bar EMA, but above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (e-mini future)
  • Gradually declining from a high of 2794.25 at 1:00 PM on June 11 in a down-sloping flag; break above 2790 will be bullish and break below 2783.00 bearish
  • RSI-9 moving around 50 since 3:30 PM on June 11; declined to near 40 at 4:30 AM
  • Below 50-bar EMA, which is below 20-bar EMA
  • Bias: Side-Down
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving sideways with a down bias since 11:30 AM on June 11;
  • The band contracted during Asian session; expanding since 3:30 AM with price moving along the lower band
  • RSI dropped below 20 at 4:45 AM; now above 50
  • The Stochastic (9, 1, 3): %K is crossed above %D below 20 at 6:00 AM; near 80
  • Bias: Side

Previous Session

Major U.S. indices advanced on Monday June 11. The volume was mostly lower except for Dow Jones Transportation average. The indices gave up most of gains in the last half hour of trading.

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

 

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