Morning Notes – Monday February 11, 2019

Directional Bias For The Day:

  • S&P Futures are higher; moving sideways to up since 4:00 AM;
  • Odds are for sideways to up day – watch for break below 2711.75 and above 2721.50 for more calrity
  • No key economic data due:

Markets Around The World

  • Markets in the East closed mixed – Hong Kong, Seoul and Singapore were up; Sydney and Mumbai were down; Shanghai and Tokyo were closed
  • European markets are up
  • Currencies:
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • USD/INR
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
  • Commodities:
    Up Down
    • NatGas
    • Crude Oil
    • Gold
    • Silver
    • Copper
    • Platinum
    • Palladium
    • Sugar
    • Coffee
    • Cotton
    • Cocoa
  • Bonds
    • 10-yrs yield is at 2.666%, up from February 8 close of 2.632%;
    • 30-years is at 3.006%, up from 2.976%
    • 2-years yield is at 2.483%, up from 2.463%
    • The 10-Year-&-2-Year spread is at 0.183, up from 0.169

Key Levels:

  • Critical support levels for S&P 500 are 2697.45, 2681.83 and 2675.79
  • Critical resistance levels for S&P 500 are 2719.32, 2724.15 and 2733.00
  • Key levels for eMini futures: break above 2720.75, the high of 8:00 AM and break below 2711.75, the low of 7:00 AM


  • On Friday, at 4:00 PM, S&P future (January contract) closed at 2707.50 and the index closed at 2707.88 – a spread of about -0.25 points; futures closed at 2706.25 for the day; the fair value is +1.25
  • Pre-NYSE session open, futures price action is to the upside – at 9:00 AM, S&P 500 futures were up by +8.25; Dow by +94; and NASDAQ by +33.75

Directional Bias Before Open

  • Weekly: Downtrend reversing
  • Daily: Up
  • 120-Min: Down-Side
  • 30-Min: Up
  • 15-Min: Up-Side
  • 6-Min: Side

The trend and patterns on various time frames for S&P 500:

  • Under Pressure
  • October 2018 closed sharply lower; broke below previous four months’ lows; only third down month since October 2016; November was a harami spinning top near the lower end of October
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2% – continues; higher highs and higher lows
  • The week ending on February 8 was a doji candle following the bullish engulfing candle of previous week; staying above the downtrend line from October 2018 high
    • Stochastics (9,1, 3) and RSI (14) moving up – %K is above %D and above 90; RSI is moving up and is just above 50
    • The index is at the 61.8% retracement of the decline from the high in early October 2018
    • The index reached below the 50% Fibonacci retracement level – at 2374.98 – from the rally from February 2016 low and reached a low of 2346.58; the 61.8% Fibonacci retracement is near 2251.86
    • During the week of October 22, Stochastics reached the lowest since the week of October 31, 2016; last week RSI reached the lowest since the week on August 15, 2011;
  • Last week was up +1.35 or +0.0% and ATR is 57.15
  • Last week’s pivot point=2709.56, R1=2737.30, R2=2766.71; S1=2680.15, S2=2652.41; No pivot levels were breached;
  • An up week; second in a row and fourth in last five weeks and sixth in last ten weeks
  • The break above an ascending triangle in May 2018 is nullified as the price has fallen below its low
  • The break above a down sloping flag on April 24 2017 is also nullified; the 161.8% extension target near 2835.46 was achieved; 100% extension target of a longer flag-pole near 2913.13 is achieved
  • Last swing low, 2532.69, was the low on February 5, 2018 and breached in December 2018
  • Below 10-week EMA and 39-week SMA; below 89-week SMA (first since June 27, 2016)
  • Downtrend Reversing
  • A green candle that gapped down at the open but then closed very near the close of Thursday; almost no upper shadow and small lower shadow; the irregular shaped evening star may be nullified
    • %K is below %D falling below 80;
    • RSI-14 below 65; just above 60
    • RSI-9 is falling; near 60; 8-SMA of RSI9 is till rising
    • Sequence of lower highs and lower lows since October 3, 2018; need to rise above 2800.18 to break it
  • Above 20-day EMA, 50-day EMA; at/below 100-day SMA; below 200-day SMA
  • Uptrend
2-Hour (e-mini future)
  • Drifting up since 10:00 AM on Friday;
    • Made a double bottom; The 61.8% extension target of the DT near 2718.25 is achieved; the 100% extension target is near 2726.00 and the 161.8% extension target is near 2738.50
    • The Flag-Pennant targets, made late January, 38.2% extension target is near 2758.00, the 61.8% extension target is near 2815.00 and the 100% extension target is near 2906.00
  • RSI-9 is moving higher 10:00 AM on February 7; made a bullish divergence at 6:00 AM on Friday
  • Above 20-bar EMA, which is at/below EMA10 of EMA50
  • Bias: Down-Side
30-Minute (e-mini future)
  • Moving sideways since 4:00 AM after moving up from 8:30 PM on Sunday
  • RSI-9 is rising from below 60 since 6:30 AM after falling from above 80 at 4:00 AM
  • Above 20-bar EMA, which is above  EMA10 of EMA50
  • Bias: Up
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving up since 3:15 AM
  • The band narrowed from 111:30 PM to 2:45 AM; expanded from 3:15 AM; narrowing since 8:15 AM
  • RSI-21 is declining since 4:00 AM; made a bearish failure swing at 8:00 AM
  • Stochastic (9, 1, 3): %K crossed below %D from above 90; below 60
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mixed on Friday February 8 in mostly lower volume. Dow Jones Industrial Average, Dow Jones Transportation Average and NYSE Composite closed down. S&P 500, NASDAQ Composite, Russell 2000 and Wilshire 5000 Total Market Index closed up.

For week ending on February 8, NYSE Composite closed down and all others were up. The volume was lower than previous week.


The S&P 500 gained 0.1% this week despite recurring concerns about a slowdown in global growth and a U.S. China trade deal leading to some profit-taking action.

The Dow Jones Industrial Average gained 0.2%, the Nasdaq Composite gained 0.5%, and the Russell 2000 gained 0.5%.

The utilities (+2.0%), information technology (+1.8%), industrials (+1.5%), and real estate (+1.4%) sectors were this week’s leaders. Conversely, the S&P 500 energy (-3.3%), materials (-1.6%), and financial (-1.5%) sectors were this week’s laggards.


Earnings reports this week were mixed and replete with disappointing guidance. Alphabet (GOOG) and Walt Disney (DIS) headlined the week’s reports but both exceeded expectations.


U.S. Treasuries saw some continued buying interest this week, pushing yields lower across the curve. The 2-yr yield decreased four basis points to 2.46%, and the 10-yr yield decreased six basis points to 2.63%. The U.S. Dollar Index increased 1.1% to 96.63 while WTI crude lost 4.5% to $52.76/bbl.

  • S&P 500 Sectors
Sector Daily Trend (Visual) Relative Strength (Last Month – January) Relative Strength (February) %K vs. %D (January)
Consumer Discretionary Down XLY SPY (Cross-Under) Above
Consumer Staples Down SPY (Cross-Under) SPY Cross-Over
Energy Down XLE (Cross-Over) XLE Above
Materials Down SPY (Cross-Under) SPY Above
Industrials Down XLI (Cross-Over) XLI Above
Finance Down XLF (Cross-Over) SPY (Cross-Under) Above
Technology Down SPY XLK (Cross-Over) Above
Utility Under Pressure SPY (X-Under) SPY Cross-Over
Heath Care Down SPY (Cross-Under) SPY Cross-Over
Real Estate Down XLRE (Cross-Over) XLRE Above
Telecom Down XLT (Cross-Over) XTL Above


Print Friendly, PDF & Email