Morning Notes – Tuesday February 14, 2017

/ February 14, 2017

Directional Bias For The Day:

  • The futures are almost unchanged
  • Moving sideways in a narrow range since 2:30 PM on February 13
  • Odds are for a sideways to an up day; watch for the break above 2329.00 or below 2323.25 for change of fortunes

Markets Around The World

  • Markets in the East closed mostly lower – Shanghai was an exception
  • European markets are mixed – Germany, Switzerland and STOXX 600 are down; U.K., France, Spain, and Italy are up
  • Dollar index and EUR/USD are down, USD/JPY and GBP/USD are up
  • Commodities are mostly higher – only NatGas is down
  • 10-yrs yield is closed at 2.434% on Monday, up from February 13 close of of 2.409%; 30-years closed at 3.034%, up from February 13 close of 3.012%

Key Levels:

  • Critical support levels for S&P 500 are 2325.05, 2319.23 and 2311.10
  • Critical resistance levels for S&P 500 are 2332.75, 2337.24 and 2342.91
  • Key levels for eMini futures: break above 2329.00, high of 1:30 PM on February 13 and break below 2323.25, the low of 1:30 AM

Pre-Open

  • Pre-NYSE session open, futures price action is almost unchanged – at 8:30 AM, S&P 500 futures were up by +1.00, Dow by +4.00 and NASDAQ by +0.00
  • On Monday, at 4:00 PM, S&P future (March contract) closed at 2325.50 and the index closed at 2328.25 – a spread of about 2.75 points; futures closed at 2326.25 for the day; the fair value is -0.75

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, February 10, was a green candle, larger than previous week; for the week, the index gained +0.8%
  • Up for three weeks
  • 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
  • Another gap-up open day; made intraday and closing day highs
  • Intraday range less than 1.00% since December 29
  • Drifting higher within an up-sloping channel since December 27
  • 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)
  • Early session price action quite similar to that on Monday
  • Price targets of broken horizontal achieved
  • Uptrend confirmed
30-Minute (e-mini future)
  • Confirmed uptrend
  • Drifting sideways since 2:30 PM on February 13
  • At flattening 20-bar EMA but above rising 50-day EMA

Previous Session

U.S. indices closed higher on Monday February 13. All major indices made all time highs.

The intra-day price movement of S&P 500 was still less 1.00%. It continues to drift 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 has narrowed since December 28.

Dow Jones Industrial Average stayed above the horizontal channel that it broke above recently. The 100% extension target of the pattern is near 20240.00.

Dow Transportation Average and Russell 200 are trying to break above their respective horizontal channels.

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