Morning Notes – Tuesday September 25, 2018

Directional Bias For The Day:

  • S&P Futures are higher; moving to break above a resistance level created by the gap-down open on Sunday
  • Odds are for a sideways to a down day; watch for break above 2933.50 for change of fortune
  • Key economic data due:
    • CB Conference Confidence est. 132.2) at 10:00 AM

Markets Around The World

  • Markets in the East closed mixed – Shanghai and Sydney were down; Tokyo and Mumbai were up;  Hong Kong and Seoul were closed
  • European markets are higher
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • Dollar index
    • USD/JPY
    • USD/INR
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Gold
    • Silver
    • Copper
    • Platinum
    • Palladium
    • Sugar
    • Coffee
    • Cotton
    • Cocoa
  • Bonds
    • 10-yrs yield is at 3.100%, up from September 24 close of 3.078%;
    • 30-years is at 3.235%, up from 3.210%
    • 2-years yield is at 2.839%, up from 2.825%
    • The 10-Year-&-2-Year spread is at 0.261, down from 0.253

Key Levels:

  • Critical support levels for S&P 500 are 2914.30, 2907.98 and 2903.82
  • Critical resistance levels for S&P 500 are 2923.79, 2927.11 and 2934.37
  • Key levels for eMini futures: break above 2932.50, the high of 8:00 AM and break below 2924.25, the low of 3:00 AM

Pre-Open

  • On Monday, at 4:00 PM, S&P future (December contract) closed at 2924.50 and the index closed at 2919.37 – a spread of about +5.00 points; futures closed at 2925.50 for the day; the fair value is -1.00
  • Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up +6.00; Dow by +64.00; and NASDAQ by +8.50

Directional Bias Before Open

  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Up-Side
  • 30-Min: Side-Up
  • 15-Min: Side-Up
  • 6-Min: Up

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 small real body – almost like a doji – red candle with small lower and smaller upper shadow; gapped down at the open and did not close the gap; a 3-day evening star in emergence; break below 2912.63 ill be critical
  • %K is below %D after making 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)
  • Beginning to turn up at 4:00 AM after moving sideways since 6:00 PM on September 23
  • Bouncing off from just above the upper  limit of a horizontal channel – more like a cup-with-handle pattern – that was broken to the upside 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)
  • The sideways move since 6:00 PM on September 23 is turning into a rounding bottom pattern
  • RSI-9 rising from a low of 27.35 AM at 10:30 AM on September 24, which also made a bullish divergence
  • Above 20-bar EMA, which is above 50-bar EMA
  • Bias: Side-Up
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is facing up since 3:00 AM
  • The band narrowed from 7:45 PM to 3:45 AM; expanding since with price moving along the upper band
  • RSI is trending up since 10:30 Am on September 24; above 65
  • The Stochastic (9, 1, 3): %K crossed below %D at 7:00 AM from above 90
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mostly lower on Monday September 24 in lower volume. NASDAQ Composite was the only index to be up for the day.

Market mostly turned around by mid-day and recovered most of the losses. S&P 500, NASDAQ, Russell 2000 and Wilshire 5000 Total Market Index staged better recoveries than others.

Energy was the best performing sector.

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

 

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