Morning Notes – Monday September 17, 2018

Directional Bias For The Day:

  • S&P Futures are lower; a symmetrical triangle is emerging on 15-minute chart;
  • Odds are for a sideways; watch for break above 2910.25 and below 2904.50 for clarity
  • Key economic data due:
    • Empire State Manufacturing Index (19.0 vs. 23.2 est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly lower – Sydney was up; Tokyo was closed
  • European markets are mixed – U.K., Germany, France and Switzerland are down; Spain, Italy and STOX 600 are up
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • USD/INR
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Gold
    • Silver
    • Platinum
    • Palladium
    • Cocoa
    • Copper
    • Sugar
    • Coffee
    • Cotton
  • Bonds
    • 10-yrs yield is at 2.958%, down from September 14 close of 2.994%;
    • 30-years is at 3.150%, up from 3.132%
    • 2-years yield is at 2.782%, unchanged
    • The 10-Year-&-2-Year spread is at 0.192, up from 0.138

Key Levels:

  • Critical support levels for S&P 500 are 2895.77, 2892.06 and 2882.63
  • Critical resistance levels for S&P 500 are 2906.32, 2908.30 and 2912.26
  • Key levels for eMini futures: break above 2909.00, the high of 4:30 AM and break below 2905.75, the low of 6:00 AM

Pre-Open

  • On Friday, at 4:00 PM, S&P future (December contract) closed at 2911.00 and the index closed at 2904.98 – a spread of about +6.00 points; futures closed at 2911.50 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 -3.50; Dow by -23.00; and NASDAQ by -17.25

Directional Bias Before Open

  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Side
  • 30-Min: 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 September 14 was a green candle with almost no upper shadow and small lower shadow; closed above previous week’s high
  • Last week’s pivot point=2893.35, R1=2919.93 R2=2934.87; S1=2878.41, S2=2851.83; S1/S2 pivot levels were breached;
  • An up week following a down week; fourth in last five weeks and eight 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 small green real body with small lower shadow and smaller upper shadow
  • %K above %D; above 90
  • Above 20-day EMA, above 50-day EMA, 100-day SMA and 200-day SMA
  • Uptrend
2-Hour (e-mini future)
  • Moving sideways since 2:00 AM on September 14; moving along 20-EMA since 6:00 Pm on Sunday
  • RSI-9 moving around 50 since 6:00 PM on Sunday
  • At/above 20-bar EMA, which is above EMA10 of EMA50
  • Bias: Side
30-Minute (e-mini future)
  • Moving sideways since 10:00 AM on September 14
  • RSI-9 mostly above 40 since 1:00 PM on September 14
  • At/above 20-bar EMA, which is at/above 50-bar EMA
  • Bias: Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving sideways 4:45 PM on September 14
  • The band narrowed from 11:00 PM to 3:30; expanded slightly after that
  • RSI mostly between 40 and 65 since 8:15 PM on September 16
  • The Stochastic (9, 1, 3): %K crisscrossing %D
  • Bias: Side

Previous Session

Major U.S. indices mostly closed higher on Friday September 14 in mixed volume. NASDAQ Composite closed down. Dow Jones Industrial Average and Dow Jones Transportation Average traded in lower volume.

For the week, major U.S. indices closed higher in mixed volume. Only one S&P sector – Finance – closed down for the week.

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

 

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