Market Remarks

Morning Notes – Thursday July 26, 2018

Directional Bias For The Day:

  • S&P Futures are lower; moving sideways since 6:00 PM on Wednesday in a narrow range
  • Odds are for a sideways to down day – watch for break above 2841.25 and below 2833.50 for clarity
  • Key economic data due:
    • Durable Goods (1.0% vs. 3.0% est.) at 8:30 AM
    • Core Durable Goods (0.4% vs. 0.5% est.) at 8:30 AM
    • Unemployment Claims (217K vs. 215K est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly lower – Mumbai and Seoul were up
  • European markets are mostly higher – U.K. is lower
  • Currencies:
    Up Down
    • USD/JPY
    • USD/CHF
    • USD/INR
    • Dollar index
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • USD/CAD
  • Commodities:
    Up Down
    • NatGas
    • Copper
    • Platinum
    • Palladium
    • Coffee
    • Cocoa
    • Crude Oil
    • Gold
    • Silver
    • Sugar
    • Cotton
  • Bonds
    • 10-yrs yield is at 2.967%, up from July 25 close of 2.936%;
    • 30-years is at 3.095%, up from 3.064%
    • 2-years yield is at 2.673%, unchanged
    • The 10-Year-&-2-Year spread is at 0.294, up from 0.263

Key Levels:

  • Critical support levels for S&P 500 are 2830.36, 2818.58 and 2811.12
  • Critical resistance levels for S&P 500 are 2851.48, 2867.45 and 2872.09
  • Key levels for eMini futures: break above 2838.75, the high of 8:00 AM and break below 2833.50, the low of 1:00 AM

Pre-Open

  • On Wednesday, at 4:00 PM, S&P future (September contract) closed at 2847.25 and the index closed at 2846.07 – a spread of about +1.25 points; futures closed at 2841.25 for the day; the fair value is -6.00
  • Pre-NYSE session open, futures price action is mixed – at 8:30 AM, S&P 500 futures were down by -5.50; Dow up by +57.00; and NASDAQ down by -55.25

Directional Bias Before Open

  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend resumed
  • 120-Min: Up
  • 30-Min: Up-Side
  • 15-Min: 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 20 was a small doji candle
  • Last week’s pivot point=2802.61, R1=2815.98, R2=2830.13; S1=2788.46, S2=2775.09; R1 pivot level was breached;
  • A third up week in a row; third in last five weeks and seventh in last ten weeks
  • Breaking above an ascending triangle but still within an upsloping flag; a 100% extension target would be near 3070.00 level
  • 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 bullish engulfing candle with shaved bottom and almost no upper shadow
  • %K is above %D just below 90;
  • Above 20-day EMA, 50-day EMA, 100-day SMA and 200-day SMA
  • Uptrend resumed
2-Hour (e-mini future)
  • Declining from a high of 2849.50 at 4:00 PM on July 25; near 2836.00 after almost 33% retracement of the last rally from July 25 low of 2814.00
  • RSI-9 declining from the high of 84.26 at 4:00 PM on July 25
  • Above 20-bar EMA; which is above EMA10 of EMA50
  • Bias: Up
30-Minute (e-mini future)
  • Moving sideways since 6:00 PM on July 25 within 2839,.50 and 2834.25, the high and low of the 6:00 PM candle
  • RSI-9 is moving around 50 since 9:00 PM
  • At 20-bar EMA, which is above 50-bar EMA
  • Bias: Up-Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving sideways since 10:45 PM on July 25
  • The band contracted since 10:45 PM
  • RSI moving around 50 since 6:00 PM on July 25
  • The Stochastic (9, 1, 3): %K crossing below %D just under 80
  • Bias: Side

Previous Session

Major U.S. indices closed higher on Wednesday July 25. Most are also trying to break above a multi-month resistance level, though only NASDAQ Composite made all-time high. Most also made either one-day reversal or breakout candlestick line. Russell 2000 was the lone exception. The volume was mostly lower. Only S&P 500 traded in higher volume.

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

 

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