Directional Bias For The Day: To the upside
10:00 AM – S&P Futures Breakout of a Bullish Flag
The flag pole started to form at 3:00 AM NY time. The low was at 2041.25. The high of 2058.00 was reached at 8:30 AM. The flag was formed till 9:30 AM and the low was at 2055.75. The height of the pole is 16.75 points. This gives a measured target of 2072.50 to the pattern.
This target goes well with the resistance levels and emerging patterns at higher time-frames.
8:00 AM – Today’s Critical Pivot Levels
S&P 500
| Level | Break Chance | |
| Pivot | 2050.29 | |
| R1 | 2053.33 | 48% |
| R2 | 2058.61 | 41% |
| R1 | 2061.65 | 42% |
| S1 | 2045.01 | 45% |
| S2 | 2041.97 | 48% |
| S3 | 2036.69 | 10% |
Note: R2 break probability comes in picture only when R1 is broken. So are the probabilities calculated for R3, S2 and S3.
Yesterday
The market stayed within a trading range. S&P was bounded by 2055.48 and 2049.06 for most of the day. It collapsed in the last hour to break day’s low and close at 2048.33. However, based upon the price-patterns on higher time frames, day’s price action, technical indicators and lack of any significant economic report, this session-end drop was not as bearish as it indicates.
8:00 AM – Pre-NYSE Session Open
Asian Session
The late-session decline in S&P 500 carried over to the Asian sessions marginally. The S&P futures did not decline and stayed in a very narrow range and drifted upward. The Asian bourses were mixed.
- Shanghai Composite fell by -21.98 or -0.77%;
- Nikkei fell by -155.84 or 0.94%;
- Sydney and Seoul also dropped by -0.44% and -0.90% respectively
- Hong Kong and Mumbai rose by +0.11% and +0.30% respectively.
European Session
Europe mostly gapped down at the open but then recovered quickly to get into the green for the morning session. Before NYSE open European stocks were generally up.
- DAX was up by +1.5%; FTSE-100 by +0.95%; CAC-40 by +1.7%; Spain by +1.5%; Italy by +2.0%
Currencies
- Dollar index is trending up so was British Pound
- Most of the other majors are trending down
- Emerging market currencies are mixed
Treasury Yields
Yields on 30-years and 10-years treasuries are trending up pre-NYSE open. Yesterday, yields fell. If they close up today then they will form a morning star candlestick pattern. This is after a short decline though at the upper limit of down-sloping flag on daily time-frame.
Commodities
- WTI Crude is trending up for the day and also on daily timeframe.
- NatGas is trending down; Also making an evening star candlestick formation on daily time-frame
- Gold and Silver are down maintaining the downtrend after May 2nd high. Gold is in a trading range after breaking above a symmetrical triangle but then fell below it – a bearish signal. Silver completes a short H&S reversal pattern on daily time frame
- Copper just completed a double-top bearish reversal formation on daily time-frame. A fall below 2.038 – the low made on May 19th – will be quite bearish
- Bloomberg Commodity Index is trending down for the day. The daily time-frame shows that its forming an upward sloping flag since mid-January from all time lows. Despite 16% above the low, it is stll not out of the woods.
