Morning Notes – Tuesday August 1, 2017

/ August 1, 2017

Directional Bias For The Day:

  • S&P Futures are higher
  • Off the high of 2477.25 reached at 4:30 AM
  • Moving up in an up-sloping channel since 1:30 AM on July 27
  • Odds are for an up day – watch for break below 2471.25 for a change of fortunes
  • Key economic data due:
    • Core PCE Price Index (0.1% vs. 0.1% est.) at 8:30 AM
    • Personal Spending (0.1% vs. 0.1% est.), Personal Income (0.0% vs. 0.4% est.) at 8:30 AM
    • ISM Manufacturing PMI (est. 56.4) at 10:00 AM

Markets Around The World

  • Markets in the East closed higher
  • European markets are higher – Switzerland is closed
  • Dollar index and USD/JPY are up; GBP/USD and EUR/USD are lower
  • Commodities are lower
  • 10-yrs yield closed at 2.292% on July 31 up from July 28 close of 2.289%; 30-years closed at 2.898% up from 2.892%

Key Levels:

  • Critical support levels for S&P 500 are 2468.53, 2464.66 and 2459.93
  • Critical resistance levels for S&P 500 are 2477.96, 2481.96 and 2484.04
  • Key levels for eMini futures: break above 2475.25, the high of 6:30 AM and break below 2471.25, the low of 7:00 AM

Pre-Open

  • On Monday, at 4:00 PM, S&P future (September contract) closed at 2467.50 and the index closed at 2470.30 – a spread of about 2.75 points; futures closed at 2468.00 for the day; the fair value is -0.50
  • Pre-NYSE session open, futures price action is to the upside – at 8:15 AM, S&P 500 futures were up by +5.00; Dow by +93.00; and NASDAQ by +16.25

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Side
  • 30-Min: Up

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

Monthly
  • Confirmed Uptrend
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2%
Weekly:
  • A doji candle near the middle of the range for the last week, Friday July 28; made all time highs during the week
  • Last week’s pivot point 2472.02; R1=2484.12, R2=2496.13; S1=2460.01, S2=2447.91
  • A down week – first after three up weeks and second in last five weeks; third in last ten weeks
  • Broke above a down sloping flag (2378.36) on April 24, which has bullish implications; first target is near 2520.00 and the second target is near 2640.00
  • Broke above a down-sloping flag on November 14, 2016; first target of 2285.92 is achieved; second target is near 2467.50
  • Last swing low, 2322.25, was the low on March 27, 2017
  • Above 39-week SMA, 89-week SMA and 10-week SMA
  • Confirmed uptrend, though pulling back
Daily
  • A red candle with almost same sized upper and lower shadows; a break below Friday’s low is still relevant for more move down
  • Last pattern was down-sloping flag in June, which was broken to the upside o July 13; the first target (100%) extension is near 2507.00; pattern before that was a horizontal channel, resulting in upside break, with a 100% extension target near 2480.00
  • Above 20-day EMA, 50-day EMA, 100-day and 200-day
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Continues Monday’s chart pattern – futures rising up in stair shape after bouncing off the support made by the highs made on July 14 and above the sharp decline of 12:00 Noon candle on July 27; higher highs and higher lows since 6:00 AM on July 28
  • Sequence of higher highs and higher lows, since 12:00 PM on June 29, is in danger of breaking; a break below 2457.00 will do it
  • Above 20-bar EMA, which is at 50-bar EMA
30-Minute (e-mini future)
  • Moving up in an up-sloping channel; broke above an uneven horizontal channel at 2:30 PM on July 28 and, after a test of the upper limit, again at 2:00 AM on July 31; the 100% extension target is near 2473.00 and 161.8% is near 2476.50
  • Below up-sloping 20-bar EMA but above 50-bar EMA

Previous Session

Major U.S. indices closed mostly down on Monday, July 31. Dow Jones Industrial Average and NYSE Composite closed up. DJIA made another high.

NASDAQ Composite made a bearish engulfing pattern. Dow Jones Transportation Average made a dark-cloud cover pattern,

 

Only three S&P 500 sectors – Energy, Finance and Utility – were up on Monday.

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