Morning Notes – Wednesday September 19, 2018

Directional Bias For The Day:

  • S&P Futures are little changed; at a downtrend line from Tuesday’s high
  • Odds are for an up day; watch for break below 2905.75 for change of fortune
  • Key economic data due:
    • Building Permits (1.23M vs. 1.31M est.) at 8:30 AM
    • Housing Starts (1.28M vs. 1,24M est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly higher – Mumbai and Seoul closed down
  • European markets are mixed – U.K., Germany, France and Switzerland are up; Spain, Italy and STOXX 6-00 are down
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • Dollar index
    • USD/JPY
    • USD/CAD
    • USD/INR
  • Commodities:
    Up Down
    • Crude Oil (unch.)
    • Gold
    • Silver
    • Copper
    • Platinum
    • Palladium
    • Sugar
    • Coffee
    • Cotton
    • NatGas
    • Cocoa
  • Bonds
    • 10-yrs yield is at 2.958%, down from September 18 close of 3.048%;
    • 30-years is at 3.203%, up from 3.195%
    • 2-years yield is at 2.807%, unchanged
    • The 10-Year-&-2-Year spread is at 0.115, down from 0.241

Key Levels:

  • Critical support levels for S&P 500 are 2895.44, 2886.16 and 2879.20
  • Critical resistance levels for S&P 500 are 2911.17, 2916.50 and 2922.71
  • Key levels for eMini futures: break above 2913.75, the high of 2:30 AM and break below 2905.50, the low of 8:00 AM

Pre-Open

  • On Tuesday, at 4:00 PM, S&P future (December contract) closed at 2911.25 and the index closed at 2904.31 – a spread of about +7.00 points; futures closed at 2911.75 for the day; the fair value is -0.50
  • Pre-NYSE session open, futures price action is to the downside – at 8:45 AM, S&P 500 futures were down -3.25; Dow by -20.00; and NASDAQ by -5.25

Directional Bias Before Open

  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Side
  • 30-Min: Up-Side
  • 15-Min: 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 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 relatively large green bullish engulfing candle with small upper shadow and almost no lower shadow;
  • %K crossed above %D after dropping to 55.86 from 93.94
  • Above 20-day EMA, above 50-day EMA, 100-day SMA and 200-day SMA
  • Uptrend
2-Hour (e-mini future)
  • Gradually declining from the high of 2914.00 at 2:00 PM on September 18; Declined from a high of 2917.25 at 2:00 AM on September 14 to a low 2883.50 by 6:00 PM on September 17 before rising
  • RSI-9 declining from a high of 70.63 to 50.66
  • At/above 20-bar EMA, which is above EMA10 of EMA50
  • Bias: Side
30-Minute (e-mini future)
  • Below a downtrend line from a high of 2914.00 at 2:00 PM on September 18
  • RSI-9 declining after making a bearish divergence at 2:00 PM on September 18 at 71.92; just above 40
  • Below 50-bar EMA, which is below 20-bar EMA
  • Bias: Up-Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is drooping down 3;!5 PM on September 18
  • The band mostly narrow since midnight
  • RSI trending down from above 50; just above 40 after dropping below it
  • The Stochastic (9, 1, 3): %K crisscrossing %D near 30-40
  • Bias: Side

Previous Session

Major U.S. indices closed higher on Tuesday September 18 in mixed volume. Most made bullish engulfing pattern. Both Dow indices traded in higher volume and others in lower volume.

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

 

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