Morning Notes – Monday October 1, 2018

Directional Bias For The Day:

  • S&P Futures are higher; moving higher since making a double bottom at 8:00 AM on September 28 at 2908.00
  • Risk appetite is on mostly off due to the US-Canada trade deal
  • Odds are for an up day; watch for break below 2931.75
  • Key economic data due:
    • ISM Manufacturing PMI (est. 60.1) at 10:00 AM

Markets Around The World

  • Markets in the East closed mixed – Tokyo and Mumbai were up; Sidney, Singapore and Seoul were down; Shanghai and Hong Kong were closed
  • European markets are higher
  • Currencies:
    Up Down
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • USD/INR
    • EUR/USD
    • AUD/USD
    • NZD/USD
    • USD/CAD
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Platinum
    • Sugar (Unch.)
    • Coffee
    • Cotton
    • Gold
    • Silver
    • Copper
    • Palladium
    • Cocoa
  • Bonds
    • 10-yrs yield is at 3.074%, up from September 28 close of 3.056%;
    • 30-years is at 3.220%, up from 3.197%
    • 2-years yield is at 2.831%, up from 2.807%
    • The 10-Year-&-2-Year spread is at 0.243, down from 0.249

Key Levels:

  • Critical support levels for S&P 500 are 2911.23, 2903.28 and 2895.44
  • Critical resistance levels for S&P 500 are 2927.22, 2931.15 and 2938.40
  • Key levels for eMini futures: break above 2937.75, the high of 6:00 AM and break below 2931.75, the low of 8:30 AM

Pre-Open

  • On Friday, at 4:00 PM, S&P future (December contract) closed at 2919.00 and the index closed at 2913.98 – a spread of about +5.00 points; futures closed at 2919.00 for the day; the fair value is +0.00
  • Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up +13.75; Dow by +162.00; and NASDAQ by +41.75

Directional Bias Before Open

  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Side
  • 30-Min: Up-Side
  • 15-Min: Up-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 28 was a small red candle – that looks like a doji – with almost equal sized small upper and lower shadows;
    • the whole candle, with shadows, was completely contained within the real body of previous week
    • Stochastics (9,1, 3) and RSI (14) are making bearish divergences
  • Last week’s pivot point=2916.14, R1=2928.99 R2=2944.01; S1=2901.12, S2=2888.27;no pivot levels were breached;
  • A down week after two up weeks; second in last five weeks and third 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 red real body candle with small lower shadow but larger upper shadow
  • %K crossed above %D but is agan drooping down
  • Above 20-day EMA, above 50-day EMA, 100-day SMA and 200-day SMA
  • Uptrend
2-Hour (e-mini future)
  • Broke above a down trendline from the high of September 21; breaking above a descending triangle
  • RSI-9 turning down from a high of 72.57 reached at 4:00 AM
  • Above 20-bar EMA, which is above EMA10 of EMA50
  • Bias: Side
30-Minute (e-mini future)
  • Turning down from the high of 2937.75 reached at 5:00 AM; near a support level at 2932.00
  • RSI-9 making lower lows and lower highs since making a high at 11:00 Pm on September 30; making a bearish divergence
  • Below 20-bar EMA, but above 50-bar EMA
  • Bias: Up-Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is mostly trending up since 4:45 PM on Friday; slightly moving sideways since 3:00 AM
  • The band was narrow from 2:30 PM to 3:30 AM; expanding since with price first moved along the upper band till 5:30 AM; price moving along the lower band since 7:00 AM
  • RSI-9 made bearish divergence at 5:00 AM just above 65 and Is trending down; below 40
  • The Stochastic (9, 1, 3): %K is moving down and crisscrossing %D since 5:00 AM
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mixed on Friday September 28 in mostly higher volume. S&P 500, Dow Jones Transportation Average and NYSE Composite closed down. Others were up. NASDAQ Composite traded in lower volume.

The major indices closed mostly lower in lower volume. NASDAQ Composite was higher for the week. For the week, only four S&P sectors closed higher – Consumer Discretionary (+0.3%), Energy (+0.9%), Technology (+1.0%) and Heathcare (+0.9%). The weakest sectors were Materials (-4.3%) and Finance (-4.0%).

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

 

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