Morning Notes – Tuesday March 28, 2017

/ March 28, 2017

Directional Bias For The Day:

  • The futures are lower
  • Moved down from 2:00 AM high 2344.00
  • Odds are for an up day; watch for break below 2332.0 for change of fortunes
  • Key economic data: Conference Board Consumer Confidence at 10:00 AM
  • Volatility will be elevated

Markets Around The World

  • Markets in the East closed mostly higher – Shanghai was down
  • European markets are mostly higher – France and Switzerland are down
  • Dollar index is higher; USD/JPY, GBP/USD and EUR/USD are lower;
  • Commodities are mostly down – crude oil is higher
  • 10-yrs yield closed at 2.373% on March 28 down from March 24 close of 2.359%; 30-years closed at 2.979% down from 3.002%

Key Levels:

  • Critical support levels for S&P 500 are 2336.21, 2327.59 and 2322.25
  • Critical resistance levels for S&P 500 are 2350.51, 2355.19 and 2358.92
  • Key levels for eMini futures: break above 2344.00, high of 2:00 AM and break below 2332.50, the low of 2:00 PM on March 27

Pre-Open

  • Pre-NYSE session open, futures price action is to the down side – at 8:15 AM, S&P 500 futures were down by -3.50, Dow by -25.00 and NASDAQ by -4.75
  • On Monday, at 4:00 PM, S&P future (June contract) closed at 2337.75 and the index closed at 2341.59 – a spread of about +2.75 points; futures closed at 2338.50 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, Friday March 24, was a  bearish engulfing that broke below the four-week lows
  • A down week – only the second one in last nine weeks
  • Broke above a down-sloping flag on November 14, 2016; first target of 2285.92 and second target of 2363.14 are achieved
  • Last swing low, 2083.79, was the low on November 4, 2016
  • Above 39-week SMA and 89-week SMA
Daily
  • March 27 was gap down open but then closed near the highs for the day just below the real body of March 24, was a relatively larger bearish engulfing
  • Broke below a descending triangle with target near 2308.00;
  • Broke a sequence of higher highs and higher lows; broke below an uptrend line since November lows
  • Only one intraday range of more than 1.00% since December 29 is broken
  • Breaking out from an up-sloping channel that is in effect since December 27
  • Above 100-day and 200-day; at or near 50-day SMA/EMA; below 20-day EMA
  • Last swing low 2263.62
2-Hour (e-mini future)
  • Bounced off near the support of the lows of 10:00 AM February 14; now turning down near the 50-bar EMA
  • Continue down after the break of support level of 2331.25, the low of February 15
  • Uptrend broken; sequence of lower highs and lower lows
  • At recently rising 20-bar EMA; below falling 50-bar EMA
30-Minute (e-mini future)
  • Bounced off support after making double bottom near 2318.00 – at 2:30 AM on March 27 and 9:30 AM on March 27;
  • Turning down from the prior broken support/current resistance
  • Broke below a symmetric triangle at 1:30 PM;  first target of on March 24; the target of 2324.25 was met during Asian session; the second target is near 2313.25, which is also near 2308, target from descending triangle on daily timeframe
  • Down trend since 3:30 AM on March 16; lower lows and lower highs;
  • Below falling 50-bar EMA and 20-bar EMA

Previous Session

U.S. indices closed mixed on Monday March 27 after a sharp decline at the open.

S&P 500 gapped down at the open but made the day’s low in the first ten minutes of trading. Then it moved up consistently. A brief decline at 1:00 PM did not last and the index closed near the highs for the day. It was briefly in positive but closed slightly in red. NASDAQ Composite, Russell 2000 and Dow Jones Transportation Average were positive.

S&P 500 found support at the gap-up[open of February 13. NASDAQ Composite and Russell 2000 found support near March 22 lows.

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