Morning Notes – Wednesday January 11, 2017

/ January 11, 2017

Directional Bias For The Day:

  • The futures are trading in a narrow range since 4:00 PM on Jan 10 – high 2065.50 and low 2259.75
  • Odds are for a sideways to down day; watch for break of critical level: Friday’s low of 2258.25

Markets Around The World

  • Markets in the East were mostly up – Shanghai was the lone exception
  • European markets are mixed – Germany, U.K., Italy and Switzerland are up so is STOXX 600; France and Spain are down
  • Dollar index, EUR/USD and USD/JPY are up; GBP/USD is down
  • Commodities are mixed; WTI crude, NatGas, copper and gold are up; silver is down
  • 10-yrs yield is at 2.370%, down from Jan 10 close of 2.379; 30-years is at 2.960%, also down from 2.970% on Jan 9

Key Levels:

  • Critical support levels for S&P 500 are 2265.27, 2260.45, and 2257.32
  • Critical resistance levels for S&P 500 are 2274.22, 2279.27 and 2282.10
  • Key levels for eMini futures: break above 2265.50, high at 7:00 AM and break below 2259.50, the low of 9:30 AM on Jan 10

Pre-Open

  • Pre-NYSE session open, futures price action is to the down side – at 9:00 AM, S&P 500 futures were down by -0.75, Dow by -20.00 and NASDAQ by -1.00
  • On Tuesday, at 4:00 PM, S&P future (March contract) closed at 2263.75 and the index closed at 2268.90 – a spread of about 5.25 points; futures closed at 2263.75 for the day; the fair value is +0.00

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
  • Emerging broadening pattern since December 12
  • 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)
  • Downward pressure
  • Broke above a down-sloping flag at 10:00 AM on Jan 6 the fall back into it at 8:00 Am on Jan 9;
  • Flag pattern is morphing in to a broadening pattern
  • Broke the uptrend line from low at 2:00 PM on Dec 30
30-Minute (e-mini future)
  • Two emerging descending triangles; break above 2265.50 will cancel the inner one
  • Below a downtrend line from the high at 2:00 PM on Jan 6
  • Resistance at 2265.50, the high of 7:00 PM on Jan 10
  • Below falling 50-bar EMA and 20-day EMA

Previous Session

U.S. indices were mixed Tuesday Jan 10, 2017. NASDAQ Composite advanced and made another high. It continues its uptrend.

Dow Jones Industrial Average declined and has moved to the middle of the narrow horizontal trading range that it has traded within since December 12. Its Transport counterpart gained +0.8% and is knocking on the downtrend line that started on December 9.

S&P 500 was in the positive territory but then closed with no change. It continues to form a broadening pattern since December 12. Wilshire 5000 Total Market Index, with a similar pattern, gained slightly.  is emerging for . Russell 2000 gained and made a bullish engulfing pattern near the bottom of a horizontal trading range. NYSE Composite, which is forming a pattern similar to S&P 500, was up by +0.1%..

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