Morning Notes – Tuesday July 16, 2019

Directional Bias For The Day:

  • S&P Futures are higher; moving sideways since 10:30 PM on Sunday
  • The odds are for a to sideways to an up day – watch for break below 3010.75 for change of fortune
  • Retail Sales may have an impact
  • Key economic data due:
    • Retail Sales ( 0.4% vs. 0.1% est. ; prev. 0.4%) at 8:30 AM
    • Core Retail Sales ( 0.4% vs. 0.1% est. ; prev. 0.4%) at 8:30 AM
    • Import Prices ( -0.9% vs. -0.7% est. ; prev. 0.0% ) at 8:30 AM
    • Capacity Utilization ( est. 78.2%; prev. 78.1%) at 9:15 AM
    • Industrial Production (est. 0.1%; prev. 0.4%) at 9:15 AM
    • Business Inventories (est. 0.4%; prev. 0.5%) at 10:00 AM
    • NAHB Housing Market Index (est. 64; prev. 64) at 10:00 AM

Markets Around The World

    • Markets in the East closed mixed – Shanghai, Tokyo and Sydney closed down; Hong Kong, Mumbai, Seoul and Singapore closed higher
    • European markets are higher
    • Currencies:
Up Down
  • Dollar index
  • USD/JPY
  • USD/CHF
  • NZD/USD
  • USD/CAD
  • USD/INR
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • Commodities:
    Up Down
    • Gold
    • Silver
    • Copper
    • Platinum
    • Crude Oil
    • NatGas
    • Palladium
    • Sugar
    • Coffee
    • Cotton
    • Cocoa
  • Bonds
    • 10-yrs yield closed at 2.092%, down from July 12 close of 2.106%;
    • 30-years is at 2.612%, down from 2.633%
    • 2-years yield is at 1.833%, down from 1.857%
    • The 10-Year-&-2-Year spread is at 0.259, up from 0.249

Key Levels:

  • Critical support levels for S&P 500 are 3011.00, 3008.77 and 3004.51
  • Critical resistance levels for S&P 500 are 3017.80, 3022.65 and 3027.51
  • Key levels for eMini futures: break above 3023.50, the high of 3:30 AM on Monday and break below 3012.50, the low of 1:00 PM on Monday

Pre-Open

  • On Monday, at 4:00 PM, S&P future (June contract) closed at 3018.00 and the index closed at 3014.30 – a spread of about +3.75 points; futures closed at 3017.25 for the day; the fair value is +0.75
  • Pre-NYSE session open, futures are higher – at 7:30 AM, S&P 500 futures were up by +2.50; Dow by +34 and NASDAQ by +9.00

Directional Bias Before Open

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

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

Monthly
  • Under Pressure
  • June 2019 was a large green Piercing or Bullish Engulfing candle that closed near the open of previous week;
  • Sequence of higher highs and higher lows since February 2016 is broken in December since then a new high has been made in May 2019
Weekly:
  • The week ending on July 12 was a green candle with almost no upper shadow and small lower shadow; made all time intra-day and closing high
    • At the upper bound of a broadening pattern
    • Stochastic (9,1, 3): %K and %D are above 90; potential Bearish Divergence for %D
    • RSI (9) is rising and above 65; potential Bearish Divergence
    • The index bounced off the 89-week SMA during the week of June 7
  • Last week was up +23.36 or +0.8% and 5-week ATR is 52.19
  • Last week’s pivot point=2997.04, R1=3030.65, R2=3047.52; S1=2980.17, S2=2946.56; R1 pivot level was breached
  • An up week; fourth in last five weeks and fifth in last ten weeks
  • Last swing low, 2728.81, was the low on June 3, 2018; previous all-time high of 2940.91 was breached during July 1 week
  • Above 10-week EMA, 39-week SMA and 89-week SMA
  • Uptrend resumed
Daily
  • A small red candle with very small upper and lower shadows that closed higher; continuing the break above a cup-with-handle pattern
    • %K crossing below %D above 90
    • RSI-9 is above 75; potential Bearish Divergence
    • Sequence of higher highs and higher lows since June 3
  • Above 20-day EMA, 50-day EMA, 100-DAY SMA and 200-day SMA;
  • Uptrend
2-Hour (e-mini future)
  • Similar profile as that on Monday morning – moving higher ; from lower-left, on June 12, to upper-right corner, today, on the chart;
    • RSI-21 is mostly moving between 50 and 65 since 6:00 AM on July 10; potential Bearish Divergence
    • %K is below %D
    • Above 20-bar EMA, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (e-mini future)
  • Mostly sideways move since 10:30 PM on Sunday
    • RSI-21 is mostly moving along 50
    • %K is crisscrossing %D around 40
  • At/above 20-bar EMA, which is at/above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving sideways, and making a rounding top, since 2:30 PM on July 15
  • The Bollinger Band is relatively since 2:30 PM on Monday
  • Stochastic (9, 1, 3): %K crossed above %D at 7:00 AM
  • Bias: Side

Previous Session

Major U.S. indices closed mixed on Monday, July 15 in lower volume. Dow Jones Industrial Average, S&P 500 and NASDAQ Composite closed higher. Russell 2000, Dow Jones Transportation Average NYSE Composite and Wilshire 5000 Total Market Index closed down. The day’s price range was narrow.

From Briefing.com:

The stock market eked out small gains on Monday. The major averages struggled to find direction, but the S&P 500 (+0.02%), Dow Jones Industrial Average (+0.1%), and Nasdaq Composite (+0.2%) did manage to set new record closes. The small-cap Russell 2000 underperformed with a loss of 0.5%.

[…]

Their collective weakness weighed on the S&P 500 financials sector (-0.5%), while lower oil prices ($59.51/bbl, -$0.70, -1.2%) put some pressure on the underperforming energy sector (-0.9%). The industrials sector (-0.4%) was the one other group to finish lower amid weakness from its top-weighted components, including Boeing (BA 361.61, -3.72, -1.0%) and General Electric (GE 10.27, -0.10, -1.0%).

[…]

U.S. Treasuries finished slightly higher in a quiet session. The 2-yr yield and the 10-yr yield declined one basis point each to 1.83% and 2.09%, respectively. The U.S. Dollar Index advanced 0.1% to 96.95.

The Empire State Manufacturing Survey for July was Monday’s lone economic report:
• It checked in at 4.3 versus a June reading of -8.6. That was below the Briefing.com consensus estimate of 5.0, yet above the 0.0 demarcation line between expansion and contraction. Furthermore, there was a bump in the index for future business conditions to 30.8 from 25.7.