Market Remarks

Morning Notes – Friday August 31, 2018

Directional Bias For The Day:

  • S&P Futures are lower; forming a double bottom on 30-minute chart
  • Odds are for a sideways to down day with low volume, hence unpredictability; watch for break above 2898.25 and below 2895.00 for clarity
  • Key economic data due:
    • Chicago PMI (est. 63.0) at 9:45 AM

Markets Around The World

  • Markets in the East closed mostly down – Seoul was up
  • European markets are down
  • Currencies:
    Up Down
    • Dollar index
    • USD/CHF
    • USD/CAD
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • USD/INR
  • Commodities:
    Up Down
    • NatGas
    • Gold
    • Silver
    • Platinum
    • Palladium
    • Sugar
    • Cotton
    • Crude Oil
    • Copper
    • Coffee
    • Cocoa
  • Bonds
    • 10-yrs yield is at 2.833%, down from August 30 close of 2.860%;
    • 30-years is at 2.979%, down from 3.006%
    • 2-years yield is at 2.633%, down from 2.645%
    • The 10-Year-&-2-Year spread is at 0.200, down from 0.215

Key Levels:

  • Critical support levels for S&P 500 are 2895.25, 2884.69 and 2875.72
  • Critical resistance levels for S&P 500 are 2905.23, 2912.26 and 2916.50
  • Key levels for eMini futures: break above 2898.25, the high of 8:15 AM and break below 2895.00, the low of 8:30 AM

Pre-Open

  • On Thursday, at 4:00 PM, S&P future (September contract) closed at 2901.50 and the index closed at 2901.13 – a spread of about -0.25 points; futures closed at 2902.00 for the day; the fair value is -0.50
  • Pre-NYSE session open, futures price action is to the down side – at 9:00 AM, S&P 500 futures were down by -6.25; Dow by -63.00; and NASDAQ by -10.00

Directional Bias Before Open

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

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 August 24 was a green candle with almost no upper and lower shadow; made all time highs on intra-day and closing basis
  • Last week’s pivot point=2867.16, R1=2883.69, R2=2892.70; S1=2858.15, S2=2841.62; R1 pivot level was breached;
  • A second up week in a row; fourth in last five weeks and seventh in last ten weeks
  • Broke above an ascending triangle but retraced back to its upper limit; 100% extension target is 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 2639.44 and the 161.8% extension target near 2835.46 are achieved; the 261.8% extension target is near 3013.72
    • 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
Daily
  • A red spinning top harami candle following a large green candle than made all time highs
  • %K is crossed below %D; potential bearish divergence
  • Above 20-day EMA, 50-day EMA, 100-day SMA and 200-day SMA
  • Uptrend
2-Hour (e-mini future)
  • Declining from a high of 2917.50 at 2:00 PM on August 29; near a support/congestion level at 2894.00
  • RSI-9 made a bearish divergence eat 10:00 AM on August 29; in a downtrend since 8:00 PM on August 27; mostly below 40 since 2:00 PM on August 30
  • Below EMA10 of EMA50, which is below 20-bar EMA
  • Bias: Up-Side
30-Minute (e-mini future)
  • Forming a descending triangle
  • RSI-9 moving mostly below 50 since 9:30 PM on August 29; mostly moving along 40 since 3:00 AM
  • Below 20-bar EMA, which is below 50-bar EMA
  • Bias: Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is sloping down since 3:45 PM on August 29; new leg down since 5:30 AM
  • The band is relatively large for pre-open session
  • RSI below 65 since 3:30 PM on August 29; majority of time below 50 and occasionally dipping below 40
  • The Stochastic (9, 1, 3): %K is crisscrossing %D near 30; made a bullish divergence at 7:45 AM
  • Bias: Down-Side

Previous Session

Major U.S. indices closed lower on Thursday August 30. Dow Jones Industrial Average, S&P 500, NYSE Composite, Wilshire 5000 Total Market Index are in danger of making three day evening star pattern. A close below Thursday’s close will complete the pattern. NASDAQ Composite and Russell 2000 made intra-day all time highs but closed down. The volume was mixed. S&P 500 and Dow Transports traded in lower volume and others in higher volume.

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

 

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