Morning Notes – Friday September 28, 2018

Directional Bias For The Day:

  • S&P Futures are lower; moving lower since 4:30 AM below a downtrend line on 30-minute chart
  • Odds are for a down day; watch for break above 2921.25
  • Key economic data due:
    • Core PCE Price Index (0.0% vs. 0.1% est.) at 8:30 AM
    • Personal Spending (0.3% vs. 0.3%est.) at 8:30 AM
    • Personal Income (0.3% vs. 0.4% est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly higher – Mumbai and Seoul were down
  • European markets are down
  • Currencies:
    Up Down
    • Dollar index
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • EUR/USD
    • GBP/USD
    • USD/CHF
    • USD/CAD
    • USD/INR
  • Commodities:
    Up Down
    • Crude Oil
    • Gold
    • Silver
    • Copper
    • Platinum
    • Palladium
    • Sugar
    • Coffee
    • NatGas
    • Cotton
    • Cocoa
  • Bonds
    • 10-yrs yield is at 3.037%, down from September 27 close of 3.056%;
    • 30-years is at 3.174%, down from 3.183%
    • 2-years yield is at 2.823%, down from 2.831%
    • The 10-Year-&-2-Year spread is at 0.218, down from 0.225

Key Levels:

  • Critical support levels for S&P 500 are 2903.28, 2895.44 and 2890.43
  • Critical resistance levels for S&P 500 are 2917.01, 2921.62 and 2927.22
  • Key levels for eMini futures: break above 2915.00, the low of 3:00 AM and break below 2908.00, the low of 8:00 AM

Pre-Open

  • On Thursday, at 4:00 PM, S&P future (December contract) closed at 2919.75 and the index closed at 2914.00 – a spread of about +5.75 points; futures closed at 2920.00 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures price action is to the downside – at 9:00 AM, S&P 500 futures were down -7.50; Dow by -80.00; and NASDAQ by -25.00

Directional Bias Before Open

  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Down
  • 30-Min: Down
  • 15-Min: Down
  • 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 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 shooting star or gravestone doji type candle formation – with a large upper shadow and very small lower shadow;
  • %K is trying to cross above %D after staying below %D since September 21 after making a bearish divergence;
  • Above 20-day EMA, above 50-day EMA, 100-day SMA and 200-day SMA
  • Uptrend
2-Hour (e-mini future)
  • Trending down since the high made on September 21 in steps; below a down trendline and making lower high and lower lows; last highs and lows are 2932.00 and 2907.50
  • RSI-9 trending down since 10:00 AM on September 27; falling below 40
  • Below 20-bar EMA, which below EMA10 of EMA50
  • Bias: Down
30-Minute (e-mini future)
  • Trending down since September 21; below another downtrend line from 12:30 PM on September 27
  • Break above a double bottom pattern at 9:00 Am on September 27 achieved most targets
  • RSI-9 trending down since 12:30 PM on September 27; near 30
  • Below 20-bar EMA, which is below 50-bar EMA
  • Bias: Down
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving down since 2:00 AM
  • The band was narrow and sideways from 8:30 PM to 2:00 AM; expanding since with price moving along the lower band
  • RSI-9 mostly below 0 since 2:15 PM on September 27; near 25
  • The Stochastic (9, 1, 3): %K crossed above %D at 7:45 AM
  • Bias: Down

Previous Session

Major U.S. indices closed mostly higher on Thursday September 27 in lower volume. Russell 2000 closed down. The indices rose after a gap up open till about 12:30 PM and then steadily declined.

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

 

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