Morning Notes – Wednesday February 1, 2017

/ February 1, 2017

Directional Bias For The Day:

  • The futures are higher
  • Trending up after making a double bottom at 11:30 AM on January 31
  • Odds are for an up day; watch for break below 2274.50 for change of fortunes

Markets Around The World

  • Markets in the East were mixed; Hong Kong was down; Tokyo, Sydney, Seoul and Mumbai were higher; Shanghai was closed
  • European markets are higher
  • Dollar index GBP/USD and USD/JPY are up; EUR/USD is down
  • Commodities are mixed: Crude oil and NatGAs are up; gold silver and copper are down
  • 10-yrs yield is at 2.487%, up from January 31 close of 2.451%; 30-years is at 3.074%, up from January close of 3.051%

Key Levels:

  • Critical support levels for S&P 500 are 2267.21, 2257.02 and 2247.39
  • Critical resistance levels for S&P 500 are 2286.01, 2300.99 and 2304.16
  • Key levels for eMini futures: break above 2285.75, high of 3:00 AM on January 30 and break below 2274.75, the low of 8:30 PM on January 31

Pre-Open

  • Pre-NYSE session open, futures price action is to the upside – at 9:00 AM, S&P 500 futures were up by +6.25, Dow is up by +73.00 and NASDAQ is up by +33.00
  • On Tuesday, at 4:00 PM, S&P future (March contract) closed at 2275.00 and the index closed at 2278.87 – a spread of about 4.00 points; futures closed at 2274.50 for the day; the fair value is +0.50

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, January 23, was a large green body following two weeks of near dojis bodies with small range within the large green body of January 2 week
  • Broke above a down-sloping flag on November 14, 2016; first target of 2285.92 is met; next target is near 2363.14
  • Last swing low, 2083.79, was the low on November 4, 2016
  • Above 39-week SMA and 89-week SMA
Daily
  • Gap down open of Monday January 30 will act as a resistance
  • A small green candle near the lower-end of the Monday’s red body within its lower shadow
  • The emerging broadening pattern since December 12, is getting nullified, a break below 2233.62 will resuscitate it
  • 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; downtrend – lower lows, lower highs
  • Broken above the downtrend line from January 6 high, that it was hugging for many days
  • Uptrend paused
30-Minute (e-mini future)
  • Below a downtrend line since 1:00 AM on January 26
  • Made a double bottom at 11:30 AM on January 31 with a breach of January 30 low
  • Broke above the intermediate high of 2277.00; 100% extension target is near 2292.00; resistance is at 2287.00 – the gap and the downtrend line
  • Above rising 50-bar and 20-day EMAs after falling below them

Previous Session

U.S. indices were mixed on Tuesday January 31, 2017. Major indices staged a turnaround near the end of the day’s session. Only NASDAQ Composite, Russell 2000 and NYSE Composite were able to get into positive territory.

All except Russell 2000 and NYSE Composite briefly breached the low of January 30, which was a gap down open day. All turned around after making the low in the morning session. The two exceptions broke above Monday’s high. S&P 500 and NASDAQ Composite came close to it. All are below the upper limit of the gap-down open of Monday. Dow Jones Industrial Average and Dow Jones Transportation Average are most away from the gap.

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