Morning Notes – Tuesday October 1, 2019

Directional Bias For The Day:

  • S&P Futures are higher;
  • The odds are for a sideways to up day – watch for break above 2994.50 and break below 2982.75 for clarity
  • Key economic data due:
    • ISM Manufacturing PMI ( 50.4 est.; prev. 49.1 ) at 10:00 AM
    • Construction Spending (0.5% est.; prev. 0.1%) at 10:00 AM
    • ISM Manufacturing Prices ( 50.5 est. ; prev. 46.0 ) at 10:00 AM

Markets Around The World

    • Markets in the East closed mostly higher – Mumbai was down; Shanghai and Hong Kong were closed
    • European markets are mostly lower – U.K. and Italy are up
    • Currencies:
Up Down
  • Dollar index
  • USD/JPY
  • USD/CHF
  • USD/CAD
  • INR/USD
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
  • Commodities:
    Up Down
    • Crude Oil
    • Silver
    • Sugar
    • Cotton
    • Cocoa
    • NatGas
    • Gold
    • Copper
    • Platinum
    • Palladium
    • Coffee
  • Bonds
    • 10-yrs yield is at 1.730%, up from September 30 close of 1.675%;
    • 30-years is at 2.178%, up from 2.121%
    • 2-years yield is at 1.646%, up from 1.616%
    • The 10-Year-&-2-Year spread is at 0.066 up from 0.059
  • VIX
    • Is at 16.08 down from September 30 close of 16.24; below 5-day SMA 16.314
    • Recent high was 18.69 on September 27; recent low was 13.31 on September 19

Key Levels:

  • Critical support levels for S&P 500 are 2983.85, 2974.97 and 2962.86
  • Critical resistance levels for S&P 500 are 2989.82, 3007.98 and 3016.37
  • Key levels for eMini futures: break above 2994.50, the high of 3:00 AM and break below 2982.75, the low of 7:00 AM

Pre-Open

  • On Monday, at 4:00 PM, S&P future closed at 2977.75 and the index closed at 2976.74 – a spread of about +1.00 points; futures closed at 2978.50 for the day; the fair value is -0.75
  • Pre-NYSE session open, futures are higher – at 9:00 AM, S&P 500 futures ere up by +10.25; Dow by +85 and NASDAQ by +30.75

Directional Bias Before Open

  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend Under Pressure
  • 120-Min:Side-Down
  • 30-Min: Side-Up
  • 15-Min: Side-Up
  • 6-Min: Down

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

Monthly
  • Under Pressure
  • September was a green candle with small lower shadow and longer upper shadow
    • Stochastic %K is forming a Bearish Divergence
    • RSI-9 is below a downtrend line from January 2018 high; forming a Bearish Divergence
    • Near the middle band of the 120-month regression channel
  • 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 September 27 was a red spinning top with almost equal sized upper and lower shadows; bias is down since the week of September 9
    • Near the upper bound of a broadening pattern
    • Stochastic (9,1, 3): %K is below %D;
    • RSI (9) is turning down and just above 50
  • Last week was down -30.28 or -1.0%; the 5-week ATR is 71.39
  • Last week’s pivot point=2971.77, R1=2998.00, R2=3034.22; S1=2935.55, S2=2909.32; S1/S2 pivot levels were breached
  • A down week; second in last five weeks and sixth 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; last swing high 3027.98 during the week of July 22
  • Above 10-week EMA; above 39-week SMA and 89-week SMA
  • Uptrend Under Pressure
Daily
  • A small green harami candle in a congestion zone
    • %K crossing above %D from near 30
    • RSI-9 turning up near 50
  • At/below 20-day EMA; above 50-day EMA, 100-day SMA, 20-DAY EMA; above 200-day SMA;
  • Uptrend Under Pressure
2-Hour (e-mini future)
  • Moving mostly sideways since 10:00 AM on September 5 – between 3025.00 and 2950.00
    • RSI-21 is rising since 12:00 PM on September 27
    • %K is below %D since midnight
  • At/above 20-bar EMA, which is above EMA10 of EMA50
  • Bias: Side-Down
30-Minute (e-mini future)
  • Drifting up since 2:30 PM on September 27
    • RSI-21 above 40 since 3:30 PM on September 27
    • %K is above %D near 70
    • At/above 20-bar EMA, which is above EMA10 of EMA50
  • Bias: Side-Up
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving sideways to up since 12:45 PM on Monday
  • The Bollinger Band was relatively narrow from 1:00 AM to 3:30 AM; expanding slightly since
  • Stochastic (9, 1, 3): %K is crisscrossing %D near 70
  • Bias: Side-Up

Previous Session

Major U.S. indices closed higher on Monday, September 30 in mixed volume. Dow Jones Industrial Average and Dow Joes Transportation Average traded in higher volume others in lower volume. The indices are moving sideways with a down bias for the last few days..

From Briefing.com:

Wall Street finished higher on Monday to wrap up the third quarter. The S&P 500 (+0.5%), Dow Jones Industrial Average (+0.4%), and Nasdaq Composite (+0.8%) posted respectable gains, lifted by shares of Apple (AAPL 223.97, +5.15, +2.4%) after JP Morgan raised its price target to $265 from $243. The Russell 2000 increased 0.2%.

[…]

The 2-yr yield and the 10-yr yield finished unchanged at 1.62% and 1.68%, respectively. The U.S. Dollar Index increased 0.3% to 99.40. Gold futures, which had rallied alongside a stronger dollar this quarter, declined 2.2% (-$33.10) to $1473.30/ozt.

Monday’s economic data was limited to the Chicago PMI for September, which declined to 47.1 (Briefing.com consensus 50.8) from 50.4 in August. 50.0 is the dividing line between an expansion and contraction.

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