Morning Notes – Friday January 27, 2017

/ January 27, 2017

Directional Bias For The Day:

  • The futures are moving sideways
  • Trending down after the high of 2299.50 at 1:00 AM on January 26
  • Odds are for a sideways to down day; watch for break above 2299.50 for change of fortunes

Markets Around The World

  • Markets in the East were mixed; Hong Kong was down; Tokyo, Sydney and Mumbai were higher; Shanghai and Seoul were closed
  • European markets are lower
  • Dollar index EUR/USD and USD/JPY are up; GBP/USD is down
  • Commodities are mostly down: Copper is the only exception
  • 10-yrs yield is at 2.497%, down from Jan 26 close of 2.508%; 30-years is at 3.086%, down from 3.091% on Jan 26

Key Levels:

  • Critical support levels for S&P 500 are 2294.08, 2288.88 and 2284.63
  • Critical resistance levels for S&P 500 are 2300.99, 2304.16 and 2307.33
  • Key levels for eMini futures: break above 2296.75, high of 2:30 AM and break below 2291.25, the low of 5:00 AM

Pre-Open

  • Pre-NYSE session open, futures price action is mixed – at 9:00 AM, S&P 500 futures were down by -0.25, Dow is down by -24.00 and NASDAQ is up by +11.25
  • On Thursday, at 4:00 PM, S&P future (March contract) closed at 2292.50 and the index closed at 2296.68 – a spread of about 4.00 points; futures closed at 2294.00 for the day; the fair value is +1.50

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 for the last week was a narrow body with longer lower shadow than upper shadow; week before it was large green candle than open in the middle of previous large bearish engulfing and closed above the highs
  • Break of the high of week 2-Jan, 2282.10, is critical for the continuation of the uptrend
  • 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
  • Small harmi red candle; made another intraday high
  • At the upper limit of an emerging broadening pattern since December 12, which is in danger of being nullified
  • Above 100-day, 200-day, 50-day, and 20-day SMA/EMA
  • Sequence of higher highs and higher lows
  • Last swing low 2263.62
2-Hour (e-mini future)
  • Trending down after making a high of 2299.50 at midnight January 25-26
  • Broken above the downtrend line from January 6 high, that it was hugging for many days
  • Sequence of lower high, lower lows since 12:00 PM on Jan 6, is broken with higher high and higher low
  • Uptrend resumption
  • At the upper limit of an emerging broadening pattern, that is danger of being nullified; it could also turn to be a TCLOS
30-Minute (e-mini future)
  • Above the horizontal channel, which formed from an emerging symmetrical triangle;
  • Drooping since making a high of 2299.50 at 1:00 AM on January 26
  • Sharp rise since 10:00 AM on January 23
  • Above rising 50-bar and 20-day EMAs
  • Uptrend resumed

Previous Session

U.S. indices were mixed and mostly traded sideways on Thursday January 26.

NYSE Composite and Wilshire 5000 Total Market Index made small red-harami candles. So did Russell 2000.

up at the open and were sharply higher on Wednesday January 25 following gains on previous day. S&P 500, Dow Jones Industrial Average, NASDAQ Composite and Dao Jones Transportation Average made new intraday highs. S&P 500 and NASDAQ closed down for the day.

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