Morning Notes – Friday January 6, 2017

/ January 6, 2017

Directional Bias For The Day:

S&P 500 eMini Futures (2-hourly) - 06-Jan-17 8:00 AM

  • The futures are drifting sideways in a narrow range since 3:30 PM Jan 5 – high 2064.75 and low 2261.50
  • Odds are for an up to sideways day

Markets Around The World

  • Markets in the East were mixed – Shanghai, Tokyo and Mumbai were down; Hong Kong, Sydney and Seoul were up
  • European markets are down
  • Dollar index and USD/JPY are up; EUR/USD and GBP/USD are down
  • Commodities are mostly down; only WTI crude is up
  • 10-yrs yield is at 2.368, down from Jan 4 close of 2.452; 30-years is at 2.9620% down from 3.045% on Jan 4

Key Levels:

  • Critical support levels for S&P 500 are 2265.76, 2260.45, and 2257.32
  • Critical resistance levels for S&P 500 are 2272.82, 2276.20 and 2279.61
  • Key levels for eMini futures: break above 2266.75, high at 8:30 AM and break below 2261.50, the low of 3:00 AM

Pre-Open

  • Pre-NYSE session open, futures price action is to the down side – at 9:15 AM, S&P 500 futures were down by -2.50, Dow by -7.00 and NASDAQ is up by +5.25
  • On Thursday, at 4:00 PM, S&P future (March contract) closed at 2263.50 and the index closed at 2269.00 – a spread of about 5.50 points; futures closed at 2264.25 for the day; the fair value is -0.25

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:
  • Candlestick was a large green candle that opened in the middle of previous large bearish engulfing and closed above its highs; this was preceded by two weeks of small body candles
  • Broke above a down-sloping flag on November 14, 2016; first target is 2285.92; next 2363.14
  • Last swing low, 2083.79, was the low on November 4, 2016
  • Above 39-week SMA and 89-week SMA
Daily
  • Below a down trend line since December 13 high of 2277.53
  • Broke below a symmetrical triangle on Dec 28; target of 2231.16 was almost reached on Dec 30 (low of 2233.62)
  • Above 100-day, 200-day, 50-day and 20-day SMA
  • Sequence of higher highs and higher lows
  • Last swing low 2263.62
2-Hour (e-mini future)
  • Emerging down-sloping flag; upper limit bounded by 2273.00, 2269.50 and 2265.50; lower limit bounded by 2248.50 and 2242.75; the lower limit was breached once to reach a low of 2233.62
  • Near the upper limit which was touched at 2:00 PM on Jan 4
30-Minute (e-mini future)
  • Previously emerging down sloping flag since 2:00 PM on Jan 4 is morphing into a horizontal channel
  • Upper limit bounded by 6:30 PM on Jan 4 high of 2266.00; high of 10:00 AM on Jan 5of 2265.25; and high 6:00 PM on Jan 5 of 2265.25
  • At flattening 50-bar EMA and 20-day EMA

Previous Session


U.S. indices were mixed on Thursday Jan 5, 2017. on Wednesday, January 4 2017.

NASDAQ Composite and NYSE Composite were the only major indices to advance. The basic contours of the respective emerging chart patterns did not change much.

Russell 2000 is fell back into the descending triangle that it broke above on Jan 4. NYSE Composite closed at all time high. It broke above the Dec 13 all time intraday high of 11256.07.

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