Morning Notes – Wednesday September 12, 2018

Directional Bias For The Day:

  • S&P Futures are lower; moving lower from a high of 2895.25 at 4:30 AM
  • Within a trading range between 2886.00 and 2895 since 11:30 AM on Tuesday
  • Odds are for a sideways to an up day; watch for break above 2892.5 and break below 2883.00 for clarity
  • Key economic data due:
    • PPI (-0.1% vs. 0.2% est.) at 8:30 AM
    • Core PPI (-0.1% vs. 0.2% est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly lower – Singapore and Mumbai were up
  • European markets are mostly higher – Spain and Italy are down
  • Currencies:
    Up Down
    • USD/CHF
    • USD/CAD
    • Dollar index
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • USD/INR
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Copper
    • Sugar
    • Coffee
    • Cotton
    • Gold
    • Silver
    • Platinum
    • Palladium
    • Cocoa
  • Bonds
    • 10-yrs yield is at 2.958%, down from September 11 close of 2.977%;
    • 30-years is at 3.102%, down from 3.124%
    • 2-years yield is at 2.727%, up from 2.740%
    • The 10-Year-&-2-Year spread is at 0.218, down from 0.229

Key Levels:

  • Critical support levels for S&P 500 are 2886.93, 2875.68 and 2866.78
  • Critical resistance levels for S&P 500 are 2892.52, 2898.22 and 2903.33
  • Key levels for eMini futures: break above 2892.50, the high of 6:30 AM and break below 2886.25, the low of 10:00 PM on September 11

Pre-Open

  • On Tuesday, at 4:00 PM, S&P future (September contract) closed at 2889.00 and the index closed at 2887.89 – a spread of about +1.00 points; futures closed at 2889.75 for the day; the fair value is -0.75
  • Pre-NYSE session open, futures price action is mixed – at 8:45 AM, S&P 500 futures were down by -1.50; Dow down by -16.00; and NASDAQ up by +0.75

Directional Bias Before Open

  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Side-Up
  • 30-Min: Side
  • 15-Min: Side-Down
  • 6-Min: Side-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 September 7 was a red candle with almost no upper shadow and small lower shadow; in danger of making  a 3-bar evening star pattern
  • Last week’s pivot point=2878.86, R1=2893.20 R2=2914.72; S1=2857.14, S2=2842.60; S1/S2 pivot levels were breached;
  • A down week in a row; third in last five weeks and second 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 green bullish engulfing candle with small upper and lower shadows;
  •  %K crossed above %D from below 20
  • Above 20-day EMA, above 50-day EMA, 100-day SMA and 200-day SMA
  • Uptrend
2-Hour (e-mini future)
  • Broke above EMA50 in second attempt at 10:00 AM on September 11; near another resistance zone formed buy the lows on August 31 and August 28
  • RSI-9 crossed above 40 at 8:00 AM on September 11; made a high of 67.31 at 2:00 AM; retraced back below 65
  • Above 20-bar EMA, which is above EMA10 of EMA50
  • Bias: Side-Up
30-Minute (e-mini future)
  • Trading between 2895.00 and 2886.00 since 11:30 AM on September 11
  • RSI-9 between 40 and 65 since 9:30 Am on September 11
  • Below 20-bar EMA but above 50-bar EMA
  • Bias: Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving sideways since 4:15 PM on September 11
  • The band was mostly narrow from 4:15 PM to 2:00 AM; expanding since then; price moved along upper band till 4:45 AM and then moving long lower band since 7:00 AM
  • RSI mostly between 40 and 65 since 9:30 AM on September 11
  • The Stochastic (9, 1, 3): %K crisscrossing %D around 20
  • Bias: Side-Down

Previous Session

Major U.S. indices closed mostly higher on Tuesday September 11 in mostly higher volume. Dow Jones Transportation Average closed lower in lower volume. Indices reached the high for the by mid-day and after that most traded sideways except for Russell 2000, which traded down from high but still closed up for the day.

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

 

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