Morning Notes – Tuesday May 30, 2017

/ May 30, 2017

Directional Bias For The Day:

  • Futures are lower
  • Drifting lower after making a triple top near 2417.00 at 9:00 AM on May 29 – break below 2408.25 will complete the pattern
  • Trading within a range since 9:00 PM on May 24 – high of 2417.75 and low of 2405.50
  • Odds are for a sideways to a down day; watch for break above 2417.75 for change of fortunes
  • Key economic data:
    • Core PCE Price Index (0.2% vs. 0.1% est.) at 8:30 AM
    • Personal Spending (0.4% vs. 0.4% est.) at 8:30 AM
    • Personal Income (0.4% vs. 0.4% est.) at 8:30 AM

Markets Around The World

  • Markets in the East were mixed – Sydney and Mumbai were higher; Tokyo and Seoul were down; Shanghai and Hong Kong were closed
  • European markets are mostly down – Italy is higher
  • Dollar index and USD/JPY are down; EUR/USD and GBP/USD are higher
  • Commodities are down
  • 10-yrs yield closed at 2.250% on May 26 down from May 25 close of 2.255%; 30-years closed at 2.916% down from 2.922%

Key Levels:

  • Critical support levels for S&P 500 are 2408.01, 2397.99 and 2387.21
  • Critical resistance levels for S&P 500 are 2418.71, 2422.08 and 2427.38
  • Key levels for eMini futures: break above 2413.25, the high of 3:30 AM and break below 2408.25, the low of 7:30 AM on May 26

Pre-Open

  • Pre-NYSE session open, futures price action is to the downside – at 8:30 AM, S&P 500 futures were down by -4.00; Dow by -31.00; and NASDAQ by -8.50
  • On Friday, at 4:00 PM, S&P future (June contract) closed at 2413.75 and the index closed at 2415.82 – a spread of about 2.00 points; futures closed at 2413.75 for the day; the fair value is +0.00

Directional Bias Before Open

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

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 26 was a large green candle with almost no lower shadow and very small upper shadow
  • Last week’s pivot point 2407.15; R1=2427.38, R2=2438.94; S1=2395.59, S2=2375.36
  • An up 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
  • A small doji candle with almost no upper and lower shadows
  • Above a horizontal channel – high 2400.58 and low 2322.25 – 100% extension target near 2480.00
  • 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
  • Mostly sideways move since February 17 – high near 2400 and the lo near 2330
  • Uptrend resumed
2-Hour (e-mini future)
  • In a narrow range since 10:00 PM on May 24
  • Making a slight round top pattern since 8:00 AM on May 26
  • Higher highs and higher lows since 4:00 AM on May 18;
  • Below 20-bar EMA; at 50-bar EMA
30-Minute (e-mini future)
  • At the lower limit of a descending triangle / horizontal channel
  • Drifting down since 9:30 AM on May 29
  • Up trend since 5:30 AM on May 18 – higher highs and higher lows – about to make first lower low
  • Below drooping 50-bar EMA and 20-bar EMA

Previous Session

U.S. indices closed mixed  on Friday May 26 before Memorial Day weekend.

S&P 500, NASDAQ Composite, Dow Jones Transportation Average and Wilshire 5000 Total Market Index closed higher. Dow Jones Industrial Average, Russell 2000 and NYSE Composite closed down.

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