Morning Notes – Friday September 7, 2018

Directional Bias For The Day:

  • S&P Futures are lower; moving down since 2:30 AM
  • Sharp down move following the release of Non-Farm Payroll report at 8:30 AM
  • Odds are for a down day; watch for break above 2875.00 for change of fortune
  • Key economic data due:
    • Non-Farm Employment Change (201K vs. 191K) at 8:30 AM
    • Unemployment Rate (3.9% vs. 3.8% est.) at 8:30 AM
    • Average Hourly Earnings (0.4% vs. 0.2% est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly lower – Shanghai and Mumbai were up
  • European markets are mostly lower – Switzerland is up
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • Dollar index
    • AUD/USD
    • USD/CAD
    • NZD/USD
    • USD/INR
  • Commodities:
    Up Down
    • Crude Oil
    • Gold
    • Silver
    • Palladium
    • Sugar
    • Coffee
    • Cocoa
    • NatGas
    • Copper
    • Platinum
    • Cotton
  • Bonds
    • 10-yrs yield closed at 2.879% on September 6, down from September 5 close of 2.902%;
    • 30-years is at 3.054%, down from 3.074%
    • 2-years yield is at 2.653%, down from 2.657%
    • The 10-Year-&-2-Year spread is at 0.242, down from 0.245

Key Levels:

  • Critical support levels for S&P 500 are 2867.29, 2854.60 and 2849.16
  • Critical resistance levels for S&P 500 are 2883.61, 2891.87, 2898.22 and 2903.32
  •  Key levels for eMini futures: break above 2878.50, the high of 5:00 AM and break below 2872.25, the low of 6:00 AM

Pre-Open

  • On Thursday, at 4:00 PM, S&P future (September contract) closed at 2880.00 and the index closed at 2878.05 – a spread of about +2.00 points; futures closed at 2879.00 for the day; the fair value is +1.00
  • Pre-NYSE session open, futures price action is to the down side – at 7:00 AM, S&P 500 futures were down by -3.75; Dow by -44.00; and NASDAQ by -13.00

Directional Bias Before Open

  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Down
  • 30-Min: Down
  • 15-Min: Down-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 August 24 was a green candle with almost no lower shadow and that closed near the middle of week’s range;  gapped up at the open on Monday and made all time highs
  • Last week’s pivot point=2900.90, R1=2917.12, R2=2932.71; S1=2885.31, S2=2869.09; R1/R2/R3 pivot levels were 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 relatively large red real body candle with small upper shadow and longer lower shadow; the low on Thursday is filled the gap that was opened on August 27
  • %K is below %D after making bearish divergence
  • At/above 20-day EMA, above 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; broke below a support/congestion level near at 2894.00; the 100% extension target near 2879.00 is achieved
  • RSI-9 is below 40 since 8:00 AM on September 6
  • Below 20-bar EMA, which is below EMA10 of EMA50
  • Bias: Down
30-Minute (e-mini future)
  • Broke below a symmetrical triangle at 10:00 AM on September 6; 100% extension target near 2868.00 is achieved; the bounce was met with a resistance at the broken lower bound of the triangle
  • RSI-9 rose above 40 at 2:30 PM on September 6 but is below 50 since then
  • Below 20-bar EMA, which is below 50-bar EMA
  • Bias: Down
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving sideways since 3:00 PM on September 6
  • The band narrowed, relatively, from 11:30 PM to 2:00 AM; expanding since then with price mostly moving along the lower band
  • RSI declined from a high of 66.71 at 2:30 AM to 35.48 by 6:00 AM; crossing above 40
  • The Stochastic (9, 1, 3): %K crossed above %D at 6:00 AM near 10 after making a bullish engulfing
  • Bias: Down-Side

Previous Session

Major U.S. indices closed mostly lower on Thursday September 6 in mixed volume. Dow Jones Industrial Average was up and NASDAQ Composite and  Russell 2000 traded in higher volume.

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

 

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