Morning Notes – Wednesday February 15, 2017

/ February 15, 2017

Directional Bias For The Day:

  • The futures are slightly down
  • Moving sideways in a narrow range since 3:30 PM on February 14
  • Odds are for a sideways to a down day; watch for the break above 2340.00 or below 2331.25 for change of fortunes

Markets Around The World

  • Markets in the East were mixed – Shanghai and Mumbai were down; Tokyo, Hong Kong, Sydney and Seoul closed higher
  • European markets are higher
  • Dollar index and EUR/USD are up, USD/JPY and GBP/USD are down
  • Commodities are mostly higher – only crude oil is down
  • 10-yrs yield closed at 2.470% on Tuesday, up from February 14 close of 2.434%; 30-years closed at 3.062%, up from February 14 close of 3.034%

Key Levels:

  • Critical support levels for S&P 500 are 2333.47, 2322.17 and 2319.23
  • Critical resistance levels for S&P 500 are 2342.72, 2347.85 and 2358.13
  • Key levels for eMini futures: break above 2340.00, high of 12:00 AM and break below 2332.00, the low of 2:30 PM on February 14

Pre-Open

  • Pre-NYSE session open, futures price action is mixed – at 8:30 AM, S&P 500 futures were down by -2.75, Dow is up by +9.00 and NASDAQ is down by -3.75
  • On Tuesday, at 4:00 PM, S&P future (March contract) closed at 2335.50 and the index closed at 2337.58 – a spread of about 2.00 points; futures closed at 2337.00 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, 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
  • Relatively large green candle that open within the body of previous candle but closed well above it; 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 Tuesday and Monday
  • Price targets of broken horizontal channel achieved
  • Uptrend confirmed
30-Minute (e-mini future)
  • Confirmed uptrend
  • Early session chart pattern look similar to that on Tuesday and Monday
  • Drifting sideways since 2:30 PM on February 13
  • At or below flattening 20-bar EMA but above rising 50-day EMA

Previous Session

U.S. indices closed higher on Tuesday February 14. Most major indices made all time highs. Dow Transportation Average did make all time high. Russell 2000 closed at all time high but did not make intraday high.

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 Transportation Average and Russell 2000 are trying to break above their respective horizontal channels. Russell 2000 is just above its upper limit and DJT is just below its. DJT also made a red harami candlestick patterns.

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