Morning Notes – Tuesday February 7, 2017

/ February 7, 2017

Directional Bias For The Day:

  • The futures are higher
  • Near the upper bound of a horizontal channel that is forming since 9:30 AM on February 3
  • Odds are for an up day; watch for break below 2285.25 for change of fortunes

Markets Around The World

  • Markets in the East were mostly lower; Sydney was the lone exception
  • European markets are higher
  • Dollar index and USD/JPY are up; EUR/USD and GBP/USD are down
  • Commodities are mostly down – NatGas is lone exception
  • 10-yrs yield closed at 2.413%, down from February 3 close of 2.491%; 30-years closed at 3.048%, down from February 3 close of 3.114%

Key Levels:

  • Critical support levels for S&P 500 are 2287.88, 2275.14 and 2271.65
  • Critical resistance levels for S&P 500 are 2296.18, 2300.99 and 2303.91
  • Key levels for eMini futures: break above 2294.25, high of 5:30 AM on February 6 and break below 2284.00, the low of 10:00 PM on February 6

Pre-Open

  • Pre-NYSE session open, futures price action is to the upside – at 7:00 AM, S&P 500 futures were up by +6.75, Dow is up by +68.00 and NASDAQ by +13.50
  • On Mondday, at 4:00 PM, S&P future (March contract) closed at 2288.00 and the index closed at 2292.56 – a spread of about 4.50 points; futures closed at 2286.50 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, January 30, was a green candle following a large green body, which followed 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
  • Small bodied doji
  • Closed the gap down open of Monday January 30 with a gap-up open, which completed the island chart pattern
  • 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)
  • Bouncing off the upper bound of a symmetrical triangle that it broke above and then fell back to the upper limit
  • Trending higher since 10:00 AM on January 31 but not crossed above the high of 2299.50 made at midnight January 25-26;
  • Broken above the downtrend line from January 6 high, that it was hugging for many days
  • Uptrend paused
30-Minute (e-mini future)
  • Knocking at the upper bound of a horizontal channel after testing the lower bound; first broke above the channel on February 3; the target is near 2307.00
  • Made a near-triple bottom at 1:30 AM on February 2
  • Above a rising 50-bar EMA and 20-day EMA

Previous Session

U.S. indices were lower on Friday February 6.

Most of the major indices made a small body doji candle. Their chart pattern on daily timeframe also did not change materially.

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