Market Remarks

Morning Notes – Thursday July 5, 2018

Directional Bias For The Day:

  • S&P Futures are higher; moving up since 2:00 AM
  • Odds are for an up day – watch for break below 2727.50 for change of fortune
  • Key economic data due:
    • ADP Non-Farm Employment Change (177K vs. 190K est.) at 8:15 AM
    • Unemployment Claims (231K vs 225K) at 8:30 AM
    • ISM Non-Manufacturing PMI (est. 58.3) at 10:00 AM
    • FOMC Meeting Minutes at 2:00 PM

Markets Around The World

  • Markets in the East closed mostly down – Sydney was up
  • European markets are higher
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • USD/INR
    • Dollar index
    • USD/CHF
    • USD/CAD
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Gold
    • Silver
    • Palladium
    • Cocoa
    • Copper
    • Platinum
    • Sugar
    • Coffee
    • Cotton
  • Bonds
    • 10-yrs yield is at 2.852%, up from July 3 close of 2.831%;
    • 30-years is at 2.974%, up from 2.838%
    • 2-years yield is at 2.520%, up from 2.516%
    • The 10-Year-&-2-Year spread is at 0.303, down from 0.305

Key Levels:

  • Critical support levels for S&P 500 are 2711.16, 2702.71 and 2698.91
  • Critical resistance levels for S&P 500 are 2736.58, 2743.26 and 2764.04
  • Key levels for eMini futures: break above 2735.75, the high of 8:00 AM and break below 2723.00, the low of 4:30 AM

Pre-Open

  • On Tuesday, at 1:00 PM, S&P future (September contract) closed at 2716.25 and the index closed at 2713.22 – a spread of about +3.00 points; futures closed at 2713.25 for the day; the fair value is +3.00
  • Pre-NYSE session open, futures price action is to the upside – at 8:15 AM, S&P 500 futures were up by +22.00; Dow by +193.00; and NASDAQ by +68.00

Directional Bias Before Open

  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend under pressure
  • 120-Min: Side
  • 30-Min: 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 June 29 was a red candle with almost no upper shadow and longer lower shadow
  • Last week’s pivot point=2718.82, R1=2745.65, R2=2772.92; S1=2691.54, S2=2664.72; S1/S2/S3 pivot levels were breached;
  • A down week; first in last five weeks and fourth 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 resumed
Daily
  • An almost dark cloud cover candle; opened with a gap up that was also the high for the day;
  • %K crossed below %D
  •  Below 50-day EMA and 20-day EMA; above 100-day SMA and 200-day SMA
  • Uptrend under pressure
2-Hour (e-mini future)
  • Moving sideways since 8:00 AM on June 25
  • Price turned down from the upper limit of a horizontal channel but the decline stopped near the middle of the range and is again approaching the upper limit
  • Declining since 10:00 AM on June 13 in steps; sequence of lower highs and lower lows; a break above 2748.00 will break this sequence
  • RSI-9 above 65 after bouncing off 40 at 10:00 PM on July 4
  • Above 20-bar EMA, which is at/above EMA10 of EMA50
  • Bias: Side
30-Minute (e-mini future)
  • Just above the middle of a horizontal trading range in effect since 9:30 AM on June 25
  • RSI-9 rising since 10:00 PM on July 3 from a low of 36.11 and is above 65
  • Above 20-bar EMA, which is above 50-bar EMA
  • Bias: Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving up since 3:00 AM
  • The band was narrow, and moved sideways, on Wednesday as the NYSE was closed
  • RSI is above 40 since 7:30 PM on July 3; above 65
  • The Stochastic (9, 1, 3): %K crossing below %D above 70
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mostly down on Tuesday July 3 on a shortened trading day due to Independence Day. Russell 2000 and NYSE Composite closed higher. Most indices made dark cloud cover candle.

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

 

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