Morning Notes – Tuesday May 23, 2017

/ May 23, 2017

Directional Bias For The Day:

  • Futures are higher
  • Moving sideways since 4:00 AM
  • Odds are for a sideways to an up day; watch for break above 2397.75 and break below 2388.25 for change of fortunes
  • No Key economic data to be released

Markets Around The World

  • Markets in the East were mostly lower – Hong Kong and Seoul were higher
  • European markets are mostly higher – Switzerland is lower
  • Dollar index is unchanged; GBP/USD, USD/JPY and EUR/USD are down
  • Commodities are mixed – crude oil, gold and silver are higher; NatGas and copper are down
  • 10-yrs yield is at 2.243% down from 2.254% on May 22; 30-years is at 2.907% down from 2.915%

Key Levels:

  • Critical support levels for S&P 500 are 2387.21, 2379.56 and 2365.22
  • Critical resistance levels for S&P 500 are 2396.05, 2405.77 and 2412.03
  • Key levels for eMini futures: break above 2397.75, the high of 4:00 AM and break below 2388.25, the low of 3:00 AM

Pre-Open

  • Pre-NYSE session open, futures price action is to the up side – at 9:00 AM, S&P 500 futures were up by +3.75; Dow by +47.00; and NASDAQ by +13.00
  • On Monday, at 4:00 PM, S&P future (June contract) closed at 2392.25 and the index closed at 2394.02 – a spread of about 1.75 points; futures closed at 2392.75 for the day; the fair value is -0.50

Directional Bias Before Open

  • Weekly: Up
  • Daily: Side
  • 120-Min: Up
  • 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 19, was a red candle with longer lower shadow than upper shadow
  • Last week’s pivot point 2382.38; R1=2412.03, R2=2435.43; S1=2358.98, S2=2329.33
  • 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
  • Another gap up open and higher close; reaching the upper limit of a horizontal channel
  • 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
  • Above 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)
  • Moving up since 6:00 PM on May 22;
  • Higher highs and higher lows since 4:00 AM on May 18; downtrend since 8:00 AM on May 16 – lower highs, lower lows – may be in danger of reversing
  • Filled the gap up open of April 23
  • Above rising 20-bar EMA and 50-bar EMA
30-Minute (e-mini future)
  • Moving higher since 3:00 AM
  • Up trend since 5:30 AM on May 18 – higher highs and higher lows
  • Above rising 50-bar EMA; just below 20-bar EMA

Previous Session

Major U.S. indices closed higher on Monday May 22, almost closing the gap down created on May 17. The low of May 16 was 2396.05 and the high of Monday’s high of 2395.46 for S&P 500.

Dow Jones Industrial Average, NASDAQ Composite, NYSE Composite and Wilshire 5000 Total Market Index have similar price-action. Russell2000 and Dow Jones Transportation Average have not yet reached the high of May 17.

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