Morning Notes – Monday July 9, 2018

Directional Bias For The Day:

  • S&P Futures are higher; moving sideways since 10:00 PM on July 8 in a very narrow range – between 2775.25 and 2770.75
  • Odds are for an up to sideways day – watch for break above 2775.25 and below 2770.75 for clarity
  • No key economic data due:

Markets Around The World

  • Markets in the East closed up
  • European markets are higher
  • 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
    • Gold
    • Silver
    • Copper
    • Palladium
    • Platinum
    • Sugar
    • Cotton
    • NatGas
    • Coffee
    • Cocoa
  • Bonds
    • 10-yrs yield is at 2.851%, up from July 6 close of 2.831%;
    • 30-years is at 2.956%, up from 2.941%
    • 2-years yield is at 2.569%, up from 2.553%
    • The 10-Year-&-2-Year spread is at 0.286, up from 0.278

Key Levels:

  • Critical support levels for S&P 500 are 2755.16, 2724.14 and 2711.16
  • Critical resistance levels for S&P 500 are 2774.86, 2782.81 and 2791.47
  • Key levels for eMini futures: break above 2775.25, the high of 7:00 AM and break below 2770.75, the low of 4:30 AM

Pre-Open

  • On Friday, at 4:00 PM, S&P future (September contract) closed at 2761.75 and the index closed at 2759.82 – a spread of about +2.00 points; futures closed at 2763.00 for the day; the fair value is -1.25
  • Pre-NYSE session open, futures price action is to the upside – at 9:00 AM, S&P 500 futures were up by +9.75; Dow by +107.00; and NASDAQ by +34.75

Directional Bias Before Open

  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend under pressure
  • 120-Min: Side-Up
  • 30-Min: Up-Side
  • 15-Min: Up-Side
  • 6-Min: 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 July 6 was a bullish engulfing candle with small upper and lower shadows;
  • Last week’s pivot point=2741.06, R1=2783.17, R2=2806.52; S1=2717.71, S2=2675.60; R1 pivot level was breached;
  • An up week; third 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 resumed
Daily
  • A large green candle with small upper and lower shadows; breaking away from past eight days congestion area
  • %K above %D and above 70
  • Above 20-day EMA, 50-day EMA, 100-day SMA and 200-day SMA
  • Uptrend under pressure
2-Hour (e-mini future)
  • Moving up since 8:00 AM on June 28; higher highs and higher lows; breaking above a downtrend line form June 13 high
  • RSI-9 above 70 since 10:00 AM on  July 5
  • Above 20-bar EMA, which is at/above EMA10 of EMA50
  • Bias: Side-Up
30-Minute (e-mini future)
  • Broken above a horizontal channel – between 2747.50 and 2698.50 – the 61.8% extension target is near 2777.75 and the 100% extension target is near 2796.50
  • RSI-9 mostly above 40 since 10:00 PM on July 3; above 65
  • Above 20-bar EMA, which is above 20-bar EMA
  • Bias: Up-Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving sideways to up since 4: 15 PM on July 6
  • The band is narrow since 2:15 AM
  • RSI is within 40 and 65 since midnight
  • The Stochastic (9, 1, 3): %K crossed below %D from above 70; declining
  • Bias: Up-Side

Previous Session

Major U.S. indices closed up on Friday July 6. Most are breaking out from the recent congestion area. The volume was higher except for Dow Jones Industrial and Transportation averages.

For the week, U.S. indices closed higher in lower volume. Most also made bullish engulfing candle patterns. Energy was the only S&P 500 sector to close down for the week.

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

 

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