Market Remarks

Morning Notes – Friday February 9, 2018

Directional Bias For The Day:

  • S&P Futures are higher from previous day’s close, which was higher than the NYSE session close
  • An up-sloping flag is emerging on 30-minute chart; a break below 2680.00 will be bearish with a target near 2530.00
  • Odds are for a bounce with elevated volatility – watch for break above 2617.00 and break below 2580.00 for a change of fortunes
  • Resistance between 2640-2645
  • No Key economic data due:

Markets Around The World

  • Markets in the East closed sharply down
  • European markets are down
  • Currencies:
    Up Down
    • Dollar index
    • EUR/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • GBP/USD
  • Commodities:
    Up Down
    • Palladium
    • Sugar
    • Coffee
    • Cotton
    • Crude Oil
    • NatGas
    • Gold
    • Silver
    • Copper
    • Platinum
    • Cocoa
  • Bonds
    • 10-yrs yield is at 2.842%, down from February 8 close of 2.851%;
    • 30-years closed at 3.147%, down from 3.137%
    • 2-years yield is at 2.118%, up from 2.117%
    • The 10-Year-&-2-Year spread is at 0.724 down from 0.734

Key Levels:

  • Critical support levels for S&P 500 are 2577.62, 2557.45 and 2544.00
  • Critical resistance levels for S&P 500 are 2616.11, 2634.35 and 2650.73
  • Key levels for eMini futures: break above 2617.00, the high of 3:00 AM and break below 2580.50, the low of 7:30 AM

Pre-Open

  • On Thursday, at 4:00 PM, S&P future (March contract) closed at 2578.25 and the index closed at 2581.00 – a spread of about -2.75 points; futures closed at 2593.50 for the day; the fair value is -15.25
  • Pre-NYSE session open, futures price action is to the upside – at 8:45 AM, S&P 500 futures were up by +16.75; Dow by +122.00; and NASDAQ by +51.25

Directional Bias Before Open

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

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

Monthly
  • Confirmed Uptrend
  • December 2017 closed higher; index has been higher for the nine straight months; it has only one down month, March 2017, since October 2016
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2%
Weekly:
  • The week ending on February 2 was a bearish engulfing candle, with a very large decline, -3.9%
  • Last week’s pivot point 2797.57 R1=2835.18 R2=2908.22; S1=2724.53, S2=2686.92; S1/S2/S3 were breached;
  • A down week; first in last five weeks and second in last ten weeks
  • Broke above a down sloping flag on April 24 2017;
    • flag-low was 2322.25 during 27-Mar-17 week; shorter flag-pole length is 317.19 and longer flag-pole length is 590.88;
    • 100% extension target of shorter flag-pole near 2639.41 is achieved; and the 161.8% extension target is near 2835.46
    • 61.8% extension target of longer flag-pole near 2687.41 is achieved; the 100% extension target is near 2913.13
  • Broke above a down-sloping flag on November 14, 2016;
    • the flag low was 2083.79 during 31-Oct-16 week; the shorter flag-pole length is 202.13 and the longer flag-pole length is 383.71;
    • 261.8% extension target of shorter flag-pole near 2612.97 is achieved
    • the 161.8% extension target of longer flag-pole near 2704.63 is achieved; the 261.8% extension target is near 3088.34
  • Last swing low, 2322.25, was the low on March 27, 2017
  • Above 10-week EM; above 39-week SMA and 89-week SMA
  • Confirmed uptrend
Daily
  • Uptrend under pressure; in correction territory – more than 10% below the recent high
  • Three day evening star candlestick pattern
  • The 38.2% Fibonacci retracement from the lows of February 2016 is near 2465.50; the 38.2% Fibonacci retracement from October 2016 lows is near 2570.00 and the index low on Thursday was 2580.56
  • Last big pattern, a down-sloping flag in June 2017, was broken to the upside on July 13, 2017; in August the index declined and tested the broken upper limit of the flag; since then the index has made three very small flags; it broke to the upside of the last flag on January 2
  • Below 50-day EMA and 100-day SMA but above 200-day SMA
2-Hour (e-mini future)
  • Bounce from the low of 2529.00 on February 5 turned down from the resistance of EMA10 of EMA50 at 2726.75; 61.2% of the bounce has been retraced on February 8
  • RSI-9 falling below 20 after rising up to 65
  • Sequence of higher highs and higher lows since August 29, 2017 is broken
  • Below 20-bar EMA, which is below EMA10 of EMA50
  • Bias: Down
30-Minute (e-mini future)
  • Irregular H&S pattern completed; target near 2526.00, which is also near the lows reached on ; break below 2645.00 will complete the pattern and break above 2700.00 will nullify it
  • An up-sloping flag is breaking down
  • RSI-14 is below 65 since 12:30 PM on February 7; rising from 22.95 but found resistance at 50
  • Below 20-bar EMA which is below 50-bar EMA
  • Bias: Down
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving sideways since 10:15 PM on February 5 after moving down on February 8
  • The band contracted during the Asian session and is expanding now with price hugging the lower band
  • RSI is between 20 and 50 since 9:45 on February 8
  • The Stochastic (9, 1, 3): %K bouncing off 0 at 7:15 AM but is in a downtrend since 3:35 AM
  • Bias: Down-Side

Previous Session

Major U.S. indices closed sharply lower on Thursday February 8. Indices completed a three-day evening star patterns and nullified Tuesday’s pricing candle. Indices are nearing 200-Day SMA.

  • S&P 500 Sectors
Up Down
  1. Consumer Discretionary
  2. Consumer Staples
  3. Energy
  4. Materials
  5. Industrials
  6. Finance
  7. Technology
  8. Utility
  9. Heath Care
  10. Real Estate
  11. Telecom

 

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