Morning Notes – Thursday May 18, 2017

/ May 18, 2017

Directional Bias For The Day:

  • Futures are sharply lower
  • Moving down since 9:30 AM on May 16
  • 20-bar EMA is acting as a resistance level
  • Futures rose to 2367 during Asian session but are not down to 2350.00
  • Odds are for a down day; watch for break above 2360.75 for change of fortunes
  • Key economic data:
    • Unemployment Claims – 232K vs. 240K est. – at 8:30 AM
    • Philly Fed Manufacturing Index – 38.8 vs. 19.9 – at 8:30 AM

Markets Around The World

  • Markets in the East were lower
  • European markets are lower
  • Dollar index, EUR/USD and USD/JPY are down; GBP/USD is up
  • Commodities are mixed – crude oil, silver and copper are down; NatGas and gold are up
  • 10-yrs yield closed at 2.216% on May 17 down from May 16 close of 2.329%; 30-years closed at 2.897% down from 2.992%

Key Levels:

  • Critical support levels for S&P 500 are 2353.02, 2344.51 and 2340.91
  • Critical resistance levels for S&P 500 are 2366.71, 2369.19 and 2376.98
  • Key levels for eMini futures: break above 2354.50, the high of 8:00 AM and break below 2344.50, the low of 5:30 AM

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 -10.50; Dow by -104.00; and NASDAQ by -16.25
  • On Wednesday, at 4:00 PM, S&P future (June contract) closed at 2356.00 and the index closed at 2357.03 – a spread of about 1.00 points; futures closed at 2357.50 for the day; the fair value is -1.50

Directional Bias Before Open

  • Weekly: Up
  • Daily: Side
  • 120-Min: Down
  • 30-Min: Down

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 May 12, was a red bearish engulfing candle, with small upper and lower shadows; pivot point 2392.17; R1=2302.60, R2=2414.30; S1=2380.47, S2=2370.04
  • A down week – second in last five weeks; fifth 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
  • Gapped down at the open and closed near the low of the day
  • Forming a double top – March 1 high of 2400.98 and May 16 high of 2405.77; the intermediate low is 2322.25; a break below it will have a target near 2240.00 level
  • Falling back within the down sloping flag that it broke above on April 24; break below 2328.95 will nullify the pattern
  • Move above an up-sloping channel since December 27 still relevant
  • Below 20-day and 50-day EMA; above 100-day and 200-day
  • Last swing low 2263.62
  • Uptrend under pressure
2-Hour (e-mini future)
  • Downtrend since 8:00 AM on May 16 – lower highs, lower lows
  • Filled the gap up open of April 23
  • Uptrend since 10:00 AM on May 11 is broken
  • Below falling 20-bar EMA, which is below 50-bar EMA
30-Minute (e-mini future)
  • Down trend since 9:30 AM on May 16 – lower lows and lower highs; EMA-20 is acting as resistance level
  • Below falling 20-bar EMA, which is below 50-bar EMA

Previous Session

Major U.S. indices closed down sharply on Wednesday May 17. All gapped down at the open and then closed near the lows of the day.

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