Morning Notes – Friday February 17, 2017

/ February 17, 2017

Directional Bias For The Day:

  • The futures are lower
  • Drifting down ever so slightly since 4:30 PM on February 15
  • Odds are for a down to sideways day; watch for the break above 2345.00 for change of fortunes

Markets Around The World

  • Markets in the East were mostly down – only Mumbai closed higher
  • European markets are lower
  • Dollar index is up. USD/JPY, EUR/USD and GBP/USD are down
  • Commodities are mixed – crude oil, NatGas and copper are down and; gold and silver are higher
  • 10-yrs yield closed at 2.450% on February 16 down from February 15 close of 2.502%; 30-years closed at 3.01%, down from February 15 close of 3.091%

Key Levels:

  • Critical support levels for S&P 500 are 2349.87, 2338.87 and 2333.47
  • Critical resistance levels for S&P 500 are 2351.31, 2358.24 and 2365.17
  • Key levels for eMini futures: break above 2347.50, high of 9:00 PM on February 16 and break below 2336.75, the low of 11:00 AM on February 16

Pre-Open

  • Pre-NYSE session open, futures price action is to the downside – at 6:45 AM, S&P 500 futures were down by -5.00, Dow  by -41.00 and NASDAQ by -6.75
  • On Thursday, at 4:00 PM, S&P future (March contract) closed at 2345.75 and the index closed at 2347.22 – a spread of about 1.50 points; futures closed at 2345.50 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, 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
  • A doji with smaller upper shadow
  • 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)
  • Price retracing for the high of 2351.50 made at 4:00 PM on February 15; at a support – weak
  • Confirmed uptrend
  • Below flattening 20-bar EMA but rising above 50-bar EMA
30-Minute (e-mini future)
  • Bouncing just above the low of 2336.75 at 11:00 AM on February 16; a break below before rising above 2351.50 will make first lower low/lower high sequence since February 8
  • Below falling 20-bar and 50-bar EMAs

Previous Session

U.S. indices closed mostly lower on Thursday February 16. Dow Jones Industrial Average was the lone exception, but it too rose by only +7.91 points.

S&P 500 made a doji candle stick pattern with a very small upper shadow and a relatively longer lower shadow. DJIA had a similar looking pattern. NASDAQ Composite’s doji candle had almost equal length upper and lower shadows. Transport gapped down but made a hammer pattern, which was also a harami candlestick. Russell 2000 made a pattern similar to that of Transports.

S&P 500 broke its streak of seven consecutive up days. It is up ten out of past twelve days. 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.

 

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