Morning Notes – Wednesday March 29, 2017

/ March 29, 2017

Directional Bias For The Day:

  • The futures are almost unchanged but lower than 4:00 PM close on March 28
  • Moved down from 3:30 AM high of 2356.75
  • Odds are for a sideways to up day; watch for break above 2356.75 and below 2350.0 for change of fortunes
  • Daily momentum is to the upside but there are some strong resistance at current levels
  • Key economic data: Pending Home Sales at 10:00 AM
  • Volatility will be elevated

Markets Around The World

  • Markets in the East closed mostly higher like that on Tuesday – Shanghai was down
  • European markets are mostly higher – Spain and Italy are down
  • Dollar index is higher; USD/JPY, GBP/USD and EUR/USD are lower;
  • Commodities are mostly down – crude oil and NatGas are higher
  • 10-yrs yield is at 2.398% down from March 28 close of 2.409%; 30-years is at 3.002% down from 3.013%

Key Levels:

  • Critical support levels for S&P 500 are 2352.14, 2340.27 and 2337.63
  • Critical resistance levels for S&P 500 are 2363.78, 2368.94 and 2381.93
  • Key levels for eMini futures: break above 2356.75, high of 3:30 AM and break below 2350.00, the low of 6:30 AM

Pre-Open

  • Pre-NYSE session open, futures price action is to the upside to unchanged – at 8:45 AM, S&P 500 futures were up by +1.00, Dow down by -1.00 and NASDAQ is up by +6.75
  • On Tuesday, at 4:00 PM, S&P future (June contract) closed at 2354.50 and the index closed at 2358.57 – a spread of about +4.00 points; futures closed at 2351.50 for the day; the fair value is +3.00

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
  • Broke a sequence of higher highs and higher lows on March 21; broke below an uptrend line since November lows
  • Uptrend under pressure; break above March 16 high of 2388.10 is critical for uptrend
  • Broke below a descending triangle on March 21; target near 2308.00 still active;  rise above 2381.93 will nullify it
  • Move above an up-sloping channel since December 27 still relevant
  • Above 100-day, 200-day and 50-day SMA/EMA; at 20-day EMA
  • Last swing low 2263.62
2-Hour (e-mini future)
  • Facing resistance – prior support – at 2360.00 – retreating since 2:00 PM on March 28; bounded by a support near 2350.00
  • Uptrend broken; sequence of lower highs and lower lows
  • Above recently rising 20-bar and 50-bar EMA
30-Minute (e-mini future)
  • Mostly sideways move since 4:00 PM on March 28
  • Down trend since 3:30 AM on March 16; sequence of lower lows and lower highs broken; within this downtrend – an uptrend from the lows of 2318.00 at 9:30 AM on March 27
  • Above rising 50-bar EMA and 20-bar EMA

Previous Session

U.S. indices closed higher on Tuesday making Monday a reversal day. S&P 500 declined during the first half hour before turning around and then continue to rise before retreating in the final hour, still closing up by 17 points.

The uptrend line form November lows is broken. The sequence of higher highs and higher lows has also broken. Critical level for uptrend to resume is a break above 2388.10.

Dow Jones Industrial Average and Russell 2000 are making a similar pattern. NASDAQ Composite did not decline as much as S&P 500, DJIA and Russell 2000 on Friday and is nearer its March 21 high than other two.

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