Morning Notes – Wednesday June 21, 2017

/ June 21, 2017

Directional Bias For The Day:

  • Futures are lower
  • At Tuesday session’s close level
  • Moving up since 3:30 AM
  • Odds are for a sideways to down day; watch for break above 2437.25 for change of fortunes
  • Key economic data due:
    • Existing Home Sales (est. 5.54M) at 10:00 AM

Markets Around The World

  • Markets in the East closed mostly down – Shanghai was up
  • European markets are lower
  • Dollar index and USD/JPY are lower; GBP/USD and EUR/USD are up
  • Commodities are mostly higher – Silver is up
  • 10-yrs yield closed at 2.153% on June 20 down from June 19 close of 2.190%; 30-years closed at 2.735% down from 2.788%

Key Levels:

  • Critical support levels for S&P 500 are 2433.95,2422.88 and 2418.53
  • Critical resistance levels for S&P 500 are 2445.03, 2453.82 and 2460.32
  • Key levels for eMini futures: break above 2437.25, the high of 10:00 PM on June 20 and break below 2428.75, the low of 4:00 AM

Pre-Open

  • On Tuesday, at 4:00 PM, S&P future (September contract) closed at 2434.75 and the index closed at 2437.03 – a spread of about 2.25 points; futures closed at 2437.50 for the day; the fair value is -2.75
  • Pre-NYSE session open, futures price action is to the downside – at 8:00 AM, S&P 500 futures were down by -3.75; Dow by -4.00; and NASDAQ by -8.50

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 16 was an almost doji with small upper and lower shadows
  • Last week’s pivot point 2431.81; R1=2445.09, R2=2457.03; S1=2419.87, S2=2406.87
  • An up week – third in last five weeks; sixth in last ten weeks
  • Broke above a down sloping flag (2378.36) on April 24, which has bullish implications; first target is near 2520.00 and the second target is near 2640.00
  • Broke above a down-sloping flag on November 14, 2016; first target of 2285.92 is achieved; second target is near 2467.50
  • Last swing low, 2322.25, was the low on March 27, 2017
  • Above 39-week SMA, 89-week SMA and 10-week SMA
  • Confirmed uptrend, though pulling back
Daily
  • A relatively large red 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
  • Above 20-day, 50-day EMA, 100-day and 200-day
  • Confirmed uptrend
2-Hour (e-mini future)
  • Moved back to the middle of an emerging broadening pattern after breaking above it on June 19
  • Higher highs and higher lows since 10:00 AM on June 12
  • Below flattening 50-bar EMA, which is below falling 20-bar EMA
30-Minute (e-mini future)
  • Declining since 3:30 PM on June 19
  • Fallen back into the horizontal channel that it broke above at 10:00 AM on June 19
  • Still above the lows of 10:30 AM on June 16
  • At falling 20-bar EMA, which is below falling 50-bar EMA

Previous Session

Major U.S. indices declined on Tuesday June 20, giving p most of their gains of Monday. S&P 500 gave up 81% of its gains of Monday. Dow Jones Industrial Average gave up 43%, NASDAQ Composite 58%, Russell 2000 133% and Dow Jones Transportation Average gave up 276% of their gains of Monday. The broader market indices Wilshire 5000 Total Market Index and NYSE Composite gave up 83% and 154% respectively.

The worst hit sectors were Consumer Discretionary (-1.3%), Energy (-1.3%), Industrials (-1.1%), Finance (-0.9%) and Technology (-0.8%). Only two sectors advanced – Healthcare (+0.3%) and Utilities (+0.1%). Within Healthcare, Biotech gained +1.3%.

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