Morning Notes – Friday June 16, 2017

/ June 16, 2017

Directional Bias For The Day:

  • Futures are higher
  • Moving sideways since 8:00 PM on June 15
  • In the middle of a horizontal channel on 30-minute chart
  • Odds are for a sideways day with an up bias; watch for break below 2431.00 for change of fortunes
  • Key economic data:
    • Building Permits (est. 1,25M) at 8:30 AM
    • Housing Start (est. 1.23M) at 8:30 AM
    • Prelim UoM Consumer Sentiments (est. 97.2) at 10:00 AM

Markets Around The World

  • Markets in the East closed mostly higher – Shanghai and Mumbai were down
  • European markets are higher
  • Dollar index is down; USD/JPY, GBP/USD and EUR/USD are up
  • Commodities are mostly up – NatGas is down and copper is unchanged
  • 10-yrs yield closed at 2.162% on June 15 up from June 14 close of 2.138%; 30-years closed at 2.785% up from 2.783%

Key Levels:

  • Critical support levels for S&P 500 are 2418.53, 2415.70 and 2403.59
  • Critical resistance levels for S&P 500 are 2444.13, 2447.92 and 2454.34
  • Key levels for eMini futures: break above 2436.75, the high of 3:00 AM and break below 2433.75, the low of 5:00 AM

Pre-Open

  • On Thursday, at 4:00 PM, S&P future (September contract) closed at 2430.75 and the index closed at 2432.46 – a spread of about 1.75 points; futures closed at 2432.00 for the day; the fair value is -1.25
  • Pre-NYSE session open, futures price action is to the upside – at 7:15 AM, S&P 500 futures were up by +3.25; Dow by +20.00; and NASDAQ by +9.25

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 June 9 was an almost doji with smaller upper shadow
  • Last week’s pivot point 2429.90; R1=2444.10, R2=2460.40; S1=2413.60, S2=2399.40
  • 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
  • A green candle that gapped down at the open below Wednesday’s low but closed near the high for the day still below last close; break above or below of Thursday’s highs and lows will be critical
  • Above a horizontal channel – high 2400.58 and low 2322.25 – 100% extension target near 2480.00
  • Above 20-day and 50-day EMA; above 100-day and 200-day
  • Last swing low 2263.62
  • Uptrend resumed
2-Hour (e-mini future)
  • Moving to middle of an emerging broadening pattern with two touches each to upper and lower limits
  • Broken the sequence of higher highs and higher lows since 4:00 AM on May 18;
  • Above recently falling 20-bar EMA and 50-bar EMA
30-Minute (e-mini future)
  • The broken ascending triangle is morphing into a horizontal channel
  • The horizontal channel is being formed since 10:00 AM on June 9, following a failed break from down-sloping flag which was in effect from June 2 to June 9
  • Above rising 50-bar EMA and 20-bar EMA

Previous Session

Major U.S. indices closed mostly lower on Thursday June 15. Dow Jones Transportation Average was up. Most formed a relatively large green candle with small lower shadows and smaller upper shadows, indicating reversal during the day. Russell 2000 made a red candle but it looked like a hammer.

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