Morning Notes – Tuesday March 7, 2017

/ March 7, 2017

Directional Bias For The Day:

  • The futures are lower
  • In a down trend since 2:30 PM on March 1; below a downtrend line
  • Lower high and lower lows on 30-minute timeframe
  • Odds are for a down day; watch for break above 2378.25 for change of fortunes

Markets Around The World

  • Markets in the East closed mixed – Tokyo and Mumbai were down and others up
  • European markets are mostly down – Germany is the only exception
  • Dollar index and USD/JPY are higher; EUR/USD and GBP/USD are lower
  • Commodities are mostly down – only crude oil is up
  • 10-yrs yield closed at 2.494% on March 6 up from March 3 close of 2.492%; 30-years closed at 3.098%, up from 3.084%

Key Levels:

  • Critical support levels for S&P 500 are 2367.98, 2358.96 and 2352.87
  • Critical resistance levels for S&P 500 are 2383.89, 2388.59 and 2400.91
  • Key levels for eMini futures: break above 2378.25 high of 3:30 PM on March 6 and break below 2367.00, the low of 11:00 AM on March 6

Pre-Open

  • Pre-NYSE session open, futures price action is to the downside – at 8:00 AM, S&P 500 futures were down by -3.75, Dow by -25.00 and NASDAQ by -9.00
  • On Monday, at 4:00 PM, S&P future (March contract) closed at 2374.75 and the index closed at 2375.31 – a spread of about 0.50 points; futures closed at 2375.50 for the day; the fair value is -0.50

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, Friday March 3, was a  green candle, that closed at the middle of the range; a very small lower shadow
  • Made another all time high
  • Up for six 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 small red candle near the close of Friday, which was a down day; small lower shadow and smaller upper shadow
  • Intraday range less than 1.00% since December 29;
  • Breaking out from an up-sloping channel that is n effect 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)
  • Drifting lower since making a high of 2301.00 at 2:00 PM on March 1; similar action to that on Monday and Friday
  • At a support from previous high; was here on Friday and Monday too though made lower lows during Asian and early European sessions
  • Retracing from the high of 2401.oo reached on March 1
  • Confirmed uptrend
  • Below falling 20-bar EMA nd at flattening 50-bar EMA
30-Minute (e-mini future)
  • Retracing from the high of 2401.00 made at 2:30 PM on March 1; lower highs and lower lows since then
  • Pre-NYSE open price action similar to that on Friday, which was unlike previous few days
  • Below flat-to-falling 20-bar EMA and 50-bar EMA

Previous Session

U.S. indices closed down on Monday March 6. S&P 500 opened with a gap down and traded lower before closing at near the opening levels. The lower shadow was small but upper shadow was smaller.

Other indices had similar price action. Russell 2000 and Dow Jones Transportation Average have fallen back into their horizontal channel that they broke out of in early March.

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