Morning Notes – Friday February 24, 2017

/ February 24, 2017

Directional Bias For The Day:

  • The futures are lower
  • Broke below a 3.50-point overnight trading range at 6:00 AM
  • Odds are for a down day; watch for break above 2361.00 for change of fortunes

Markets Around The World

  • Markets in the East were mostly down – Shanghai was up and Mumbai was closed
  • European markets are lower
  • Dollar index and USD/JPY are lower; EUR/USD and GBP/USD are higher
  • Commodities are mostly higher – only crude oil is down
  • 10-yrs yield closed at 2.388% on February 23 down from February 22 close of 2.418%; 30-years closed at 3.023% down from 3.037%

Key Levels:

  • Critical support levels for S&P 500 are 2355.09, 2351.30 and 2345.66
  • Critical resistance levels for S&P 500 are 2368.26, 2375.56 and 2382.85
  • Key levels for eMini futures: break above 2361.00, high of 4:30 AM and break below 2349.00, the low of 3:00 AM on February 21

Pre-Open

  • Pre-NYSE session open, futures price action is little changed – at 7:00 AM, S&P 500 futures were up by +1.00, Dow  by +15.00 and NASDAQ by +3.00
  • On Thursday, at 4:00 PM, S&P future (March contract) closed at 2362.00 and the index closed at 2363.81 – a spread of about 1.75 points; futures closed at 2362.75 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, 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
  • A hammer candle formation; closed lower than open with very small upper shadow but relatively larger lower 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)
  • Broke below a narrow horizontal channel – high 2365.00, low 2355.25; nearing the support level formed by lows of February 20 and February 21
  • Price mostly moving lower after making a high at 8:00 AM on February 23
  • Confirmed up-trend
  • Below flat-to-drooping 20-bar EMA; above flattening 50-bar EMA
30-Minute (e-mini future)
  • Broke below a narrow horizontal channel – high of 2364.75/2365.00 and low of 2355.75 – at 6:00 AM
  • Broke a very narrow trading range of 3.25 points from 6:00 PM on February 23 to 5:00 AM
  • Nearing the low of 2349 made at 3:00 AM on February 23
  • own 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 flat-to-drooping 20-bar EMA and flattening 50-bar EMAs

Previous Session

U.S. indices were mixed Thursday February 23. Big cap indices, Dow Jones Industrial Average and S&P 500 were up slightly as was NYSE Composite. Smaller cap heavy indices, Russell 2000, NASDAQ Composite and Dow Jones Transportation Average declined so did the Wilshire 5000 Total Market Index.

S&P 500 and DJIA closed lower than open with very small upper shadow but relatively larger lower shadow. NASDAQ made a bearish engulfing pattern. Russell 2000 opened near the low of Wednesday, which a body similar in size to that of Tuesday’s body, and then closed lower. DJT’s price-action on Thursday was similar to that of Russell but slightly larger. This does not bode well for near term price-action.

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