Morning Notes – Friday May 19, 2017

/ May 19, 2017

Directional Bias For The Day:

  • Futures are higher
  • Making a frying pan bottom since the high of 2375.0 at 2:30 PM on May 18
  • Break above Thursday high will be good for bulls
  • Odds are for an up day; watch for break below 2361.00 for change of fortunes
  • No Key economic data to be released

Markets Around The World

  • Markets in the East were mostly higher – Sydney was lower
  • European markets are higher
  • Dollar index and USD/JPY are down; EUR/USD and GBP/USD are up
  • Commodities are higher
  • 10-yrs yield closed at 2.233% on May 18 up from May 17 close of 2.216%; 30-years closed at 2.905% up from 2.897%

Key Levels:

  • Critical support levels for S&P 500 are 2352.72, 2344.51 and 2340.91
  • Critical resistance levels for S&P 500 are 2375.74, 2384.87 and 2396.05
  • Key levels for eMini futures: break above 2368.75, the high of 2:30 PM on May 18 and break below 2361.00, the low of 9:30 PM on May 18

Pre-Open

  • Pre-NYSE session open, futures price action is to the up side – at 7:45 AM, S&P 500 futures were up by +6.00; Dow by +31.00; and NASDAQ by +16.25
  • On Thursday, at 4:00 PM, S&P future (June contract) closed at 2364.75 and the index closed at 2365.72 – a spread of about 1.00 points; futures closed at 2363.50 for the day; the fair value is +1.25

Directional Bias Before Open

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

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 – third 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 but made a reversal in the first half-hour; made near piercing candle pattern; high above Wednesday’s midpoint but close below it
  • Formed 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)
  • Bouncing off 2344.50, just above April 21 low of 2340.50
  • Downtrend since 8:00 AM on May 16 – lower highs, lower lows – one higher high
  • Filled the gap up open of April 23
  • Uptrend since 10:00 AM on May 11 is broken
  • Above falling 20-bar EMA but below 50-bar EMA
30-Minute (e-mini future)
  • Rising since 5:30 AM on May 18 bucking the down trend since 9:30 AM on May 16 – lower lows and lower highs; EMA-20 is acting as resistance level
  • Above recently rising 20-bar EMA, which is above 50-bar EMA

Previous Session

Major U.S. indices closed higher on Thursday May 18, recovering 13-30% of their decline on Wednesday. S&P 500, Dow Jones Industrial Average and NASDAQ Composite made near piercing pattern. Their high point all reached above the mid-point of Wednesday’s real body but then closed below the mid-point.

 

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