Morning Notes – Thursday March 30, 2017

/ March 30, 2017

Directional Bias For The Day:

  • The futures are lower
  • Drifting lower since Asian session opening high of 2362.50
  • Broke below a descending triangle on 6-minute timeframe at 4:00 AM
  • A down-sloping flag is emerging on 30-minutes chart; a break above it during Asian session has retreated back into it
  • Odds are for a sideways to down day; watch for break above 2359.75 and below 2351.75 for change of fortunes
  • Daily momentum is to the upside but there are some strong resistance at current levels
  • Key economic data: Final GDP and Unemployment Claims at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly lower – Sydney and Mumbai were higher
  • European markets are mixed – German, Switzerland and STOXX 600 are higher; U.K., France Spain and Italy are lower
  • Dollar index, USD/JPY and GBP/USD are higher; EUR/USD is lower;
  • Commodities are mostly down – NatGas is higher
  • 10-yrs yield closed at 2.386% on March 29 down from March 28 close of 2.409%; 30-years closed at 2.992% down from 3.013%

Key Levels:

  • Critical support levels for S&P 500 are 2357.27, 2352.14 and 2340.27
  • Critical resistance levels for S&P 500 are 2363.78, 2368.94 and 2381.93
  • Key levels for eMini futures: break above 2357.75, high of 4:30 AM and break below 2351.75, the low of 11:30 AM on March 29

Pre-Open

  • Pre-NYSE session open, futures price action is to the down side – at 7:00 AM, S&P 500 futures were down by -3.50, Dow down by -25.00, NASDAQ by -6.50
  • On Wednesday, at 4:00 PM, S&P future (June contract) closed at 2357.50 and the index closed at 2361.13 – a spread of about +3.75 points; futures closed at 2357.00 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 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
  • Small real body just above large body of Tuesday, which followed a reversal move on Monday; break below Wednesday’s low of 2352.94 will be critical
  • 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; made a double top – at 2:00 PM and 8:00 PM on March 29; a break below intermediate low 2348.75 will complete the pattern
  • Uptrend broken; sequence of lower highs and lower lows with one exception
  • Above recently rising 20-bar and 50-bar EMA
30-Minute (e-mini future)
  • Drifting lower since 8:00 PM on March 29
  • 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
  • Below drooping 50-bar EMA and 20-bar EMA

Previous Session

Most of the major U.S. indices closed higher on Wednesday. Dow Jones Industrial Average and Dow Jones Transportation Average declined.

S&P 500 made a small body, with +0.1% gain, just above the large body on Tuesday. The upper and lower shadows were small too . NASDAQ Composite and Russell 2000 made similar looking pattern but with slightly larger real bodies. They also gained +0.4% and +0.3% respectively. DJIA and DJT made small harami candles.

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