Morning Notes – Friday February 10, 2017

/ February 10, 2017

Directional Bias For The Day:

  • The futures are slightly higher
  • In the middle of a horizontal channel – upper limit of 2309.50; lower limit of 2303.00
  • Odds are for a sideways to an up day; watch for the break of channel in either direction for change of fortunes

Markets Around The World

  • Markets in the East closed higher
  • European markets mostly lower – Germany is the sole exception
  • Dollar index and USD/JPY are higher; EUR/USD and GBP/USD are down
  • Commodities are mixed – crude oil and copper are higher; NatGas, gold and silver are down
  • 10-yrs yield is closed at 2.395%, up from February 8 close of of 2.351%; 30-years closed at 3.011%, up from February 8 close of 2.961%

Key Levels:

  • Critical support levels for S&P 500 are 2306.13, 2300.99 and 2296.61
  • Critical resistance levels for S&P 500 are 2313.76, 2319.60 and 2328.23
  • Key levels for eMini futures: break above 2309.50, high of 2:00 AM and break below 2303.00, the low of 7:00 PM on February 9

Pre-Open

  • Pre-NYSE session open, futures price action is slightly to the upside – at 7:00 AM, S&P 500 futures were up +1.75, Dow is up by +21.00 and NASDAQ by +5.00
  • On Thursday, at 4:00 PM, S&P future (March contract) closed at 2304.00 and the index closed at 2307.87 – a spread of about 4.00 points; futures closed at 2304.25 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 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
  • A relatively larger green body after a gap-up open
  • Intraday range less than 1.00% since December 29
  • Drifting higher within an up-sloping channel since December 27
  • The emerging broadening pattern since December 12, is 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)
  • Broke above a horizontal channel on February 9; 100% extension target is achieved near 2309.00; the 161.8% extension target is near 2317.00
  • Uptrend confirmed
30-Minute (e-mini future)
  • Forming a horizontal channel since 11:00 AM on February 9
  • At flattening 20-bar EMA but above 50-day EMA

Previous Session


U.S. indices closed higher on Thursday February 9. S&P 500, Dow Jones Industrial Average, NASDAQ Composite and Wilshire 5000 Total Market Index made all time highs but  Dow Jones Transportation Average, Russell 2000 and NYSE Composite did not.

The day’s action was still less 1.00% for the S&P 500. It is drifting up in a narrow up-sloping channel since December 27. NASDAQ Composite is also moving up in a up-sloping channel since October 28. The height of the slop narrowed since December 28.

Dow Jones Industrial Average broke above a horizontal channel. The 100% extension target of the pattern is near 20240.00. Dow Transportation Average and Russell 200 are in the middle of their respective horizontal channels.

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