Morning Notes – Wednesday October 3, 2018

Directional Bias For The Day:

  • S&P 500 eMini Futures (2-Hourly) 03-Oct-18, 8:00 AM S&P Futures are higher; moving higher since 5:00 AM on October 2; breaking above a resistance near 2936.00
  • Odds are for an up day; watch for break below 2932.25
  • Key economic data due:
    • ADP Non-Farm Employment Change (230K vs. 185K est.) at 8:15 AM
    • ISM Non-Manufacturing PMI (61.6 vs. est. 58.0) at 10:00 AM

Markets Around The World

  • Markets in the East closed mixed – Hong Kong, Tokyo and Mumbai were down; Sydney and Singapore were up; Shanghai and Seoul were closed
  • European markets are higher – Germany is closed
  • Currencies:
    Up Down
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • USD/INR
    • EUR/USD
    • AUD/USD
    • NZD/USD
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Platinum
    • Silver
    • Copper
    • Sugar
    • Coffee
    • Cotton
    • Gold
    • Palladium
    • Cocoa
  • Bonds
    • 10-yrs yield is at 3.082%, up from October 2 close of 3.056%;
    • 30-years is at 3.236%, up from 3.207%
    • 2-years yield is at 2.835%, up from 2.815%
    • The 10-Year-&-2-Year spread is at 0.247, up from 0.241

Key Levels:

  • Critical support levels for S&P 500 are 2919.49, 2917.91 and 2911.23
  • Critical resistance levels for S&P 500 are 2931.07, 2937.06 and 2940.91
  • Key levels for eMini futures: break above 2942.00, the high on 10:30 AM on October 1 and break below 2932.50, the low of 5:00 AM

Pre-Open

  • On Tuesday, at 4:00 PM, S&P future (December contract) closed at 2928.25 and the index closed at 2923.80 – a spread of about +4.50 points; futures closed at 2930.00 for the day; the fair value is -0.75
  • Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up +10.00; Dow by +91.00; and NASDAQ by +27.75

Directional Bias Before Open

  • Weekly: Uptrend
  • Daily: Uptrend
  • 120-Min: Side
  • 30-Min: Side-Up
  • 15-Min: 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 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 doji candle with small lower shadow but larger upper shadow; a break above or below Tuesday’s high or low will be critical
  • %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; retraced back to the broken uptrend line
  • RSI-9 turning up from a low of 30.67 reached at 4:00 AM on October 2; above 65
  • Above 20-bar EMA, which is above EMA10 of EMA50
  • Bias: Side
30-Minute (e-mini future)
  • Uptrend since the low of 2917.50 at 5:00 AM on October 2
  • RSI-9 rising since a bullish divergence e at 4:30 AM on October 2; between 40 and 65 since 6:00 AM on October 2; near or above 65
  • Above 20-bar EMA, which is above 50-bar EMA
  • Bias: Side-Up
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is mostly trending up since 9:45 PM
  • The band was relatively narrow from 2:30 AM to 6:45 AM; expanding since with price moving along the upper band
  • RSI-9 mostly between 40 and 65 since 5:30 AM on October 2; above 65
  • The Stochastic (9, 1, 3): %K is crisscrossing %D above 80
  • Bias: Up

Previous Session

Major U.S. indices closed mostly down on Tuesday October 2 in mixed volume. Dow Jones Industrial Average advanced. S&P 500 and NASDAQ Composite traded in lower volumes. The indices advanced at the start of the session and turned down near 2:30 PM.

  • S&P 500 Sectors
Sector Daily Trend Relative Strength Last Month Relative Strength Last Month
Consumer Discretionary Side (From Up) XLY XLY
Consumer Staples Side SPY SPY
Energy Up (From Side) SPY SPY
Materials Side SPY SPY
Industrials Up-Side XLI XLI
Finance Down SPY SPY
Technology Up XLK XLK
Utility Down SPY SPY
Heath Care Up XLV SPY
Real Estate Side-Down SPY SPY
Telecom Side SPY SPY

 

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