Morning Notes – Monday November 11, 2019

Directional Bias For The Day:

  • S&P Futures are moving sideways since 3:00 PM on Thursday
  • Veterans Day Federal holiday; no bonds trading
  • The odds are for a sideways to an up day; watch for break above 3097.00 and below 3072.50 for clarity
  • No key economic data due:

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3083.41, 3073.58 and 3065.89
  • Critical resistance levels for S&P 500 are 3097.70, 3106.10 and 3119.10
  • Key levels for eMini futures: break above 3083.25, the high of 3:30 AM and break below 3072.50, the low of 10:00 AM on Friday


  • On Friday, at 4:00 PM, S&P future closed at 3092.00 and the index closed at 3093.08 – a spread of about -1.00 points; futures closed at 3090.50 for the day; the fair value is +1.50
  • Pre-NYSE session open, futures are lower – at 8:45 AM, S&P 500 futures were down by -12.25; Dow down by -110 and NASDAQ by -32.75

Markets Around The World

  • Markets in the East closed mostly lower – Sydney and Mumbai were up
  • European markets are lower
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • INR/USD
    • Dollar index
    • USD/JPY
    • USD/CHF
  • Commodities:
    Up Down
    • Cotton
    • Crude Oil
    • NatGas
    • Gold
    • Silver
    • Copper
    • Palladium
    • Platinum
    • Sugar
    • Coffee
    • Cocoa
  • Bonds
    • 10-yrs yield closed at 1.943%, up from November 7 close of 1.926%;
    • 30-years is at 2.427%, up from 2.403%
    • 2-years yield is at 1.670%, down from 1.673%
    • The 10-Year-&-2-Year spread is at 0.273 down from 0.253
  • VIX
    • Is at 13.32 up from November 8 close of 12.07; above 5-day SMA
    • Recent high was 13.95 on October 31; recent low was 12.07 on November 8

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

  • Uptrend resumed
  • September was a green candle with small upper shadow and lower shadow longer than the real body
    • Stochastic %K is above %D and above 90
    • RSI-9 is breaking above a downtrend line from January 2018 high;
    • Rising to the upper band from 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
  • The week ending on November 8 was a green candle with almost small upper shadow and longer lower shadow
    • Breaking above the upper bound of a broadening pattern
    • Stochastic (9,1, 3): %K is above %D; above 90;
    • RSI (9) is above 70
  • Last week was up +26.17 or +0.9%; the 5-week ATR is 52.69
  • Last week’s pivot point=3085.58, R1=3105.27, R2=3117.46; S1=3073.39, S2=3053.70; R1/R2 pivot levels were breached
  • An up week; Fifth in last five weeks and eight in last ten weeks
  • Last swing low, 2728.81, was the low on June 3, 2018; last swing high was 3027.98, made during the week of July 22
  • Above 10-week EMA; above 39-week SMA and 89-week SMA
  • Uptrend
  • A small bullish engulfing candle over a doji; almost no upper shadow and small lower shadow;
    • %K is crisscrossing %D above 80
    • RSI-9 is below 8-day SMA
  • Broke above a symmetrical triangle, that resembles an ascending triangle, on October 25;
    • Upper bound 3027.98 and lower bound 2898.07; max height almost 130; break point is 3016.00; the 61.8% extension target near 3096.00 is achieved; the 100% extension target is near 3146.00;
  • Above 20-day EMA, 50-day EMA, 100-day SMA and 200-day SMA;
  • Uptrend
2-Hour (e-mini future)
  • Drifting mostly sideways to up since 8:00 AM on November 4 within a 30 point band; uptrend since October 9
    • RSI-21 dropped near 40 from near 70 on Thursday
    • %K is below %D
  • At/below 20-bar EMA, but above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (e-mini future)
  • Moving sideways since 5:00 AM on November 4
    • RSI-21 moving near 40
    • %K is crisscrossing %D lower
    • Below 20-bar EMA, which is below EMA10 of EMA50
  • Bias: Up-Side-Up
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is drifting sideways to down since 3:30 PM on Thursday
  • The Bollinger Band is relatively narrow since 1:15AM
  • Stochastic (9, 1, 3): %K is crisscrossing %D
  • Bias: Side-Up-Side

Previous Session

Major U.S. indices closed mostly higher on Friday, November 8 in lower volume. Dow Jones Transportation Average closed down. The bias for most of the day was up.

For the week, major indices closed higher in lower volume. Consumer Discretionary, Consumer Staples, Utilities and Real Estate closed lower for the week.


The S&P 500 (+0.3%), Nasdaq Composite (+0.5%), and Dow Jones Industrial Average (+0.02%) closed at record highs on Friday, even as President Trump said he had not yet agreed to roll back existing tariffs. The Russell 2000 increased 0.3%.


The S&P 500 health care (+0.8%) and information technology (+0.6%) sectors posted decent gains, while the energy (-0.8%), utilities (-0.4%), and real estate (-0.2%) sectors finished lower.

The U.S. Treasury market finished relatively unchanged in a quiet session. The 2-yr yield declined one basis point to 1.66%, and the 10-yr yield increased one basis point to 1.93%. The U.S. Dollar Index increased 0.2% to 98.37. WTI crude increased 0.2% (+$0.10) to $57.21/bbl.


• The preliminary University of Michigan Consumer Sentiment Index for November crossed at 95.7 ( consensus 95.0), which was slightly better than expected and roughly even with the final reading of 95.5 for October.
o The key takeaway from the report is that consumer expectations increased from October, underscoring an otherwise confident attitude that should continue to manifest itself in relatively solid consumer spending activity.
• Wholesale inventories declined 0.4% m/m in September ( consensus -0.1%), on top of a downwardly revised 0.1% increase (from +0.2%) in August. That was the largest decline since October 2017. Wholesale sales were flat in September after declining 0.1% in August.
o The key takeaway from the report is that it could prove difficult for wholesalers to gain pricing power given that inventory growth remains well ahead of sales growth on a yr/yr basis.

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