Morning Notes – Monday May 1, 2017

/ May 1, 2017

Directional Bias For The Day:

  • Futures are higher
  • Above an uptrend line since 6:00 PM on Sunday
  • Most of the global markets are closed due to Labor Day
  • Odds are for an up day within a narrow range watch for break above 2388.75 and break below 2383.00 for change of fortunes
  • No key economic data is scheduled for today except for Total Vehicle Sales – 17.1M est.

Markets Around The World

  • Markets in the East were mostly closed due to Labor Day – Tokyo and Sydney were higher
  • European markets are also mostly closed – STOXX 600 is down
  • Dollar index and GBP/USD are lower; USD/JPY and EUR/USD are higher
  • Commodities are mostly down – crude oil, gold, silver and NatGas are down; copper is up
  • 10-yrs yield is at 2.293% up from April 28 close of 2.282%; 30-years is at 2.963% up from 2.952%

Key Levels:

  • Critical support levels for S&P 500 are 2381.15, 2376.17 and 2369.19
  • Critical resistance levels for S&P 500 are 2393.68, 2398.16 and 2400.98
  • Key levels for eMini futures: break above 2388.75, the high of 1:00 PM on April 27, and break below 2382.75, the low of 3:00 AM

Pre-Open

  • Pre-NYSE session open, futures price action is to the upside – at 9:00 AM, S&P 500 futures were up by +5.50, Dow by +34.00 and NASDAQ by +20.50
  • On Friday, at 4:00 PM, S&P future (June contract) closed at 2380.25 and the index closed at 2384.20 – a spread of about 4.00 points; futures closed at 2380.50 for the day; the fair value is -0.25

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 April 28, was a  green candle, with no lower shadow and a up gap from previous week;
  • An up week – third in in last five weeks; sixth in last ten weeks
  • Broke above a down sloping flag (2378.36), which has bullish implications;
  • 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
  • Confirmed uptrend, though pulling back
Daily
  • A bearish engulfing pattern; break below its low of 2382.36 is critical
  • Broke above a down sloping flag on April 24; broke above 2378.36, which is bullish; found resistance at flag-pole high of 2400.98; the target will be near 2650
  • Move above an up-sloping channel since December 27 still relevant
  • Above 100-day, 200-day, 50-day SMA/EMA and 20-day EMA
  • Last swing low 2263.62
  • Uptrend under pressure
2-Hour (e-mini future)
  • Within a narrow range since 10:00 AM on April 25 – high 2389.25 and low 2382.25;
  • Forming a descending triangle; at the upper limit; a break above 2388.50 is critical for up move; lower limit break is near 2377.00
  • Uptrend since 8:00 PM on April 16; higher highs and higher lows
  • Above rising 50-bar EMA; at flat 20-bar EMA
30-Minute (e-mini future)
  • Within a narrow range since 4:00 AM on April 26 – high 2386.50 and low 2381.25
  • The descending triangle on 2-hour time frame is more like a down sloping flag on 30-minute; a break above 2388.50 will complete the flag break
  • Drifting higher since 6:00 PM on Sunday April 30
  • Above rising 50-bar EMA; at 20-bar EMA

Previous Session

Major U.S. indices closed down on Friday April 28. S&P 500, Dow Jones Industrial Average and Dow Jones Transportation Average made bearing engulfing pattern.

S&P 500 opened at the day’s high and closed near the lows for the day. DJIA and DJT had similar price patterns. NASDAQ Composite opened at all time high with nearly 12 points gap up but closed down for the day. Russell 2000 and DJT closed below the lows of April 26. DJT has closed the gap created on April 25. The critical support for DJIA is 2909.38, the low of April 26. That level is  2381.15 for S&P 500. NASDAQ critical support is 6031.59, the low for April 27.

For the week, major indices were positive except for DJT, which closed lower for the week after gapping up at Monday’s open. NYSE Composite index also gapped up at the week’s open but made a shooting star pattern, a break below 1149.15, previous week’s high will have bearish implication for the market..

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