Morning Notes – Monday September 24, 2018

Directional Bias For The Day:

  • S&P Futures are lower; making an up-sloping flag on 15-minute chart
  • Odds are for a down day; watch for break below 2930.25 for change of fortune
  • No key economic data due:

Markets Around The World

  • Markets in the East closed lower – Shanghai, Tokyo and Seoul were closed
  • European markets are higher
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • USD/INR
    • Dollar index
    • AUD/USD
    • NZD/USD
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Gold
    • Platinum
    • Palladium
    • Cocoa
    • Silver
    • Copper
    • Sugar
    • Coffee
    • Cotton
  • Bonds
    • 10-yrs yield is at 3.074%, up from September 21 close of 3.068%;
    • 30-years is at 3.209%, up from 3.205%
    • 2-years yield is at 2.83%, up from 2.805%
    • The 10-Year-&-2-Year spread is at 0.244, down from 0.263

Key Levels:

  • Critical support levels for S&P 500 are 2927.11, 2919.73 and 2907.98
  • Critical resistance levels for S&P 500 are 2934.37, 2938.40 and 2940.91
  • Key levels for eMini futures: break above 2934.25, the high of 7:00 AM and break below 2925.75, the low of 8:00 AM

Pre-Open

  • On Friday, at 4:00 PM, S&P future (December contract) closed at 2934.50 and the index closed at 2929.67 – a spread of about +5.00 points; futures closed at 2933.75 for the day; the fair value is -0.75
  • Pre-NYSE session open, futures price action is to the downside – at 8:45 AM, S&P 500 futures were down -4.50; Dow by -21.00; and NASDAQ by -30.25

Directional Bias Before Open

  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Up-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 21 was a relatively big green candle with almost equal sized small upper and lower shadows;
  • Last week’s pivot point=2918.91, R1=2951.67 R2=2973.66; S1=2896.92, S2=2864.16; R1/R2 pivot levels were breached;
  • Second up week in a row; 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 red candle with small upper and lower shadow; made all time intraday high; a break below its close would make it a reversal day
  • %K crossed below %D; a potential bearish divergence
  • Above 20-day EMA, above 50-day EMA, 100-day SMA and 200-day SMA
  • Uptrend
2-Hour (e-mini future)
  • Declined from a high of 2947.00 at 8:00 AM on September 21 to just above EMA50; moving sideways since 6:00 PM on Sunday
  • Broke above a horizontal channel – more like a cup-with-handle pattern – at 6:00 AM on September 20; the height of channel is 49.50 points; the 61.8% extension target near 2948.00 was achieved; the 100% extension target is near 2967.00
  • RSI-9 made a bearish divergence at the last high; below 40
  • Below 20-bar EMA but above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (e-mini future)
  • Moving sideways since 6:00 PM on Sunday
  • RSI-9 rising from a low of 22.38 at 6:30 PM; just above 40
  • At/below 20-bar EMA, which is below 50-bar EMA
  • Bias: Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving sideways since 10:45 PM on Sunday
  • An up-sloping flag is emerging
  • The band narrowed since 10:45 PM
  • RSI moving along 50 since 4:00 AM
  • The Stochastic (9, 1, 3): %K crossed below %D at 7:45 AM for the 3rd or 4th time; trying to cross above %D just below 20
  • Bias: Side

Previous Session

Major U.S. indices closed mixed on Friday September 21 in higher volume. S&P 500, NASDAQ Composite, Russell 2000 and Wilshire 5000 Total Market Index closed down. Dow Jones Industrial Average, Dow Jones Transportation Average and NYSE Composite closed higher. S&P 500, DJIA and Wilshire 5000 Total Market made all time high but close lower except for DJIA.

For the week, U.S. indices closed mixed. S$P 500, DJIA, NYSE Composite and Wilshire 5000 Total Market Index closed higher for the week. NASDAQ Composite, Russell 2000 and DJT closed lower. The volume was higher for the week.

For the week, the strongest S&P sectors were Materials and Financials, which gained +1.9% and +1.8% respectively. Industrial were up by +1.2%, Energy by +1.1%, Consumer Staples by +0.5% and Healthcare by +0.8%. Consumer Discretionary was unchanged. The falling sectors were Communications Services (-0.6%),  Technology (-0.4%), Utilities (-2.3%) and Real Estate (-1.3%).

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

 

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