Morning Notes – Wednesday February 22, 2017

/ February 22, 2017

Directional Bias For The Day:

  • The futures are lower
  • Drifting lower after making a high at 3:00 AM
  • Odds are for a down to sideways day; watch for the break above 2363.75 for change of fortunes

Markets Around The World

  • Markets in the East were mostly up – Tokyo was the lone exception
  • European markets are mostly lower – Germany is the lone exception
  • Dollar index is higher; USD/JPY, GBP/USD and EUR/USD are down
  • Commodities are mostly down – NatGas is up and gold is unchanged
  • 10-yrs yield closed at 2.427% on February 21 up from February 17 close of 2.425%; 30-years closed at 3.037%, up from February 17 close of 3.031%

Key Levels:

  • Critical support levels for S&P 500 are 2358.18,  2351.30 and 2345.66
  • Critical resistance levels for S&P 500 are 2369.76, 2374.13 and 2381.56
  • Key levels for eMini futures: break above 2363.75, high of 3:00 AM and break below 2355.25, the low of 6:30 AM

Pre-Open

  • Pre-NYSE session open, futures price action is to the downside – at 7:45 AM, S&P 500 futures were down by -3.50, Dow  by -12.00 and NASDAQ by -3.25
  • On Tuesday, at 4:00 PM, S&P future (March contract) closed at 2362.50 and the index closed at 2365.38 – a spread of about 3.00 points; futures closed at 2360.00 for the day; the fair value is +2.50

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, Monday February 13, was a green candle, that gapped up from previous week
  • Up for four consecutive 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
  • Gapped up at the open and maintained the gap
  • 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 moving lower after near double top on February 21
  • Chart pattern similar to that of past few days – price makes a high during Asian session then drift lower before U.S. session open but not by much
  • Confirmed uptrend
  • At rising 20-bar EMA; above rising 50-bar EMA
30-Minute (e-mini future)
  • At the lower end of a horizontal channel – high of 2364.75 and low 2355.75 = down break target near 2346.75 and up break target near 2373.75
  • Achieved the target of upside break of a descending triangle on February 21
  • Below drooping 20-bar EMA and flattening 50-bar EMAs

Previous Session

U.S. indices gapped up at the open and closed higher on Tuesday February 21. All except Dow Transportation Average made highs.

There was not much material change in the chart patterns of the indices. VIX, S&P Volatility index, is below 12.00 since January 20.

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