Morning Notes – Tuesday April 16, 2019

Directional Bias For The Day:

  • S&P Futures are higher; moving up since 10:30 AM on Monday;
  • The odds are for an up day – watch for break below 2912.75 for change of fortune
  • Key economic data due:
    • Industrial Production (est. 0.2%; prev. 01.%) at 9:15 AM
    • Capacity Utilization (est. 79.2%; prev. 78.2%0 at 9:15 AM

Markets Around The World

  • Markets in the East closed up
  • European markets are mostly higher – Spain is down
  • Currencies:
    Up Down
    • EUR/USD
    • USD/CHF
    • USD/CAD
    • USD/INR
    • Dollar index
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
  • Commodities:
    Up Down
      • Crude Oil
      • NatGas (unch.)
      • Copper
      • Palladium
      • Sugar
      • Cotton
    • Gold
    • Silver
    • Platinum
    • Coffee
    • Cocoa
  • Bonds
    • 10-yrs yield closed at 2.552%, down from April 12 close of 2.560%;
    • 30-years is at 2.963%, down from 2.971%
    • 2-years yield is at 2.398%, unchanged
    • The 10-Year-&-2-Year spread is at 0.155, down from 0.162

Key Levels:

  • Critical support levels for S&P 500 are 2902.95, 2896.48 and 2889.35
  • Critical resistance levels for S&P 500 are 2919.78, 2927.33 and 2935.16
  • Key levels for eMini futures: break above 2921.25, the high of 4:30 AM and break below 2912.75, the low of 3:00 AM

Pre-Open

  • On Monday, at 4:00 PM, S&P future (June contract) closed at 2910.00 and the index closed at 2905.58 – a spread of about +4.50 points; futures closed at 2909.50 for the day; the fair value is +0.50
  • Pre-NYSE session open, futures are higher – at 8:00 AM, S&P 500 futures were up by +10.50; Dow by +159 and NASDAQ by +30.00

Directional Bias Before Open

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

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

Monthly
  • Under Pressure
  • March 2019 was a green spinning top candle with lower shadow larger than the upper shadow
  • Third up month in a row
  • Sequence of higher highs and higher lows since February 2016 is broken
Weekly:
  • The week ending on April 12 was a green candle with the smallest change of past six weeks; small upper shadow and a lower shadow that was almost three-fourth the size of the real body
    • Stochastics (9,1, 3) and RSI (14) are moving up – %K is above %D and near 100;
    • RSI is again crossing above a downtrend line that it broke above once
    • The index has broken above the 78.6% Fibonacci retracement of the decline from the high in early October 2018
  • Last week was up +14.67 or +0.5% and ATR is 37.21
  • Last week’s pivot point=2897.09, R1=2920.86, R2=2934.30; S1=2883.65, S2=2859.88; R1 pivot level was breached
  • An up week; third in a row, forth in last five weeks and eight in last ten weeks
  • Last swing low, 2532.69, was the low on February 5, 2018 and breached in December 2018, when a lower swing low of 2346,58; since then the high of 2815.15 is breached but the all time high is not
  • Above 10-week EMA and 39-week SMA; above 89-week SMA
  • Uptrend
Daily
  • A small red candle that is almost like doji with small lower shadow and smaller upper shadow
    • %K is crisscrossing  %D above 80;
    • Stochastic (70, 1, 3) Pop since February 11
    • RSI-9 is above 70; SMA8 of RSI-9 is moving up
    • The sequence of higher highs and higher lows since December 26, 2018
  • Above 20-day EMA; above 50-day EMA, 100-DAY SMA and 200-day SMA
  • Uptrend
2-Hour (e-mini future)
  • Moving higher following a break above a horizonal trading range on April 12
    • Broke above symmetrical or descending triangle on March 28; 100% extension target near 2890.00 is achieved; 161.8% extension target is near 2935.00
    • The Flag-Pennant, breakout January 30, the 61.8% extension target near 2815.00 is achieved and the 100% extension target is near 2906.00
  • RSI-9 is moving up; above 70; at risk of forming a Bullish Divergence
  • %K crossed below %D at 2:00 AM; above 80
  • Above 20-bar EMA, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (e-mini future)
  • Moving up since 3:30 PM on April 9; above a steeper uptrend line from April 11 low; walking up the Bollinger Band
    • Broke above a horizontal channel, within another larger trading range, on April 12; the 100% extension target near 2915.00 is achieved; the 161.8% extension target is near 2926.00
  • RSI-9 rising since 10:30 AM on Monday; above 60
  • %K is crisscrossing %D above 50;
  • 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 3:00 PM on Monday
  • The Bollinger Band was narrow from 7:17 PM to 1:15 AM; expanded slightly since then with price mostly walking up the upper band
  • Stochastic (9, 1, 3): %K crossed above %D at 6:45 AM; above 60
  • Bias: Up

Previous Session

Major U.S. indices closed lower on Monday, April 15 in lower volume. The day’s price action was indecisive. Indices opened lower and declined for first few hours. They either reversed course or stabilized around midday before closing the day down.

From Briefing.com:

The S&P 500 declined 0.1% on Monday, as shares of financial stocks pulled back following another round of bank earnings. Despite the modest decline, the S&P 500 managed to close above the 2900 level in front of several key earnings reports tomorrow.

The Dow Jones Industrial Average (-0.1%) and the Nasdaq Composite (-0.1%) also lost 0.1%. The Russell 2000 underperformed with a loss of 0.4%.

[…]

U.S. Treasuries traded in a tight range on Monday. The 2-yr yield finished flat at 2.39%, and the 10-yr yield decreased one basis point to 2.55%. The U.S. Dollar Index finished flat at 96.94. WTI crude lost 0.7% to $63.45/bbl after Russia floated the possibility that it might boost production with OPEC to increase their market share.

[…]

• The Empire State Manufacturing Survey for April increased to 10.1 (Briefing.com consensus 9.0) from 3.7 in March with a pickup in new orders helping to drive things. The dividing line between expansion and contraction for this regional manufacturing survey is 0.0.

  • S&P 500 Sectors
Sector Relative Strength (Last Month – March) Relative Strength (April) %K vs. %D (April)
Consumer Discretionary XLY (Cross-Over) XLY Above
Consumer Staples XLP (Cross-Over) SPY (Cross-Under) Above
Energy SPY (Cross-Under) SPY Above
Materials SPY XLB (Cross-Over) Above
Industrials SPY (Cross-Under) SPY Above
Finance SPY XLF (Cross-Over) Above
Technology XLK XLK Above
Utility XLU (Cross-Over) SPY (Cross-Under) Below
Heath Care SPY SPY Below
Real Estate XLRE (Cross-Over) SPY (Cross-Under) Above
Telecom SPY (Cross-Under) XTL (Cross-Over) Above

 

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