Morning Notes – Tuesday June 27, 2017

/ June 27, 2017

Directional Bias For The Day:

  • Futures are lower
  • Futures declining since 10:00 AM on June 26; a break below Monday’s low will be bearish
  • Odds are for down to sideways day; watch for break above 2437.25 for change of fortunes
  • Key economic data due:
    • Conference Board Consumer Confidence (est. 116.1) at 10:00 AM

Markets Around The World

  • Markets in the East were mixed – Shanghai, Tokyo and Seoul were up; Hong Kong, Sydney and Mumbai were down
  • European markets are lower
  • Dollar index is down; USD/JPY, GBP/USD and EUR/USD are up
  • Commodities are higher
  • 10-yrs yield closed at 2.137% on June 26 down from June 23 close of 2.144%; 30-years closed at 2.696% down from 2.714%

Key Levels:

  • Critical support levels for S&P 500 are 2437.03, 2430.74 and 2422.88
  • Critical resistance levels for S&P 500 are 2450.42, 2453.82 and 2455.56
  • Key levels for eMini futures: break above 2436.00, the high of 5:00 AM and break below 2432.00, the low of 7:30 AM

Pre-Open

  • On Monday, at 4:00 PM, S&P future (September contract) closed at 2436.25 and the index closed at 2439.07 – a spread of about 2.75 points; futures closed at 2436.00 for the day; the fair value is +0.25
  • Pre-NYSE session open, futures price action is to the down side – at 8:15 AM, S&P 500 futures were down by -2.00; Dow by -18.00; and NASDAQ by -23.25

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 16 was an almost doji with small upper shadow and smaller lower shadow
  • Last week’s pivot point 2440.95; R1=2451.17, R2=2464.03; S1=2428.09, S2=2417.87
  • An up week – fourth in last five weeks; seventh 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 small red bodied candle with small lower shadow and larger upper shadow; break below Monday’s low will be bearish
  • 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)
  • Moving mostly sideways since 4:00 PM on June 20;  in the middle of an emerging broadening pattern; the move towards the upper limit failed
  • Higher highs and higher lows since 10:00 AM on June 12; break 2428..00 will first lower high and lower low since then
  • Just below flat 20-bar EMA and 50-bar EMA
30-Minute (e-mini future)
  • Break above the ascending triangle turned down at 2447.50, barely reaching the target near 2449.00
  • Down move since 10:00 AM on June 26
  • Below recently falling 20-bar EMA, which is below 50-bar EMA

Previous Session

Major U.S. indices mostly advanced on Monday June 26. However, they also gave up most of their gains after the first half hour of trading. The price action makes Monday almost a reversal day. NASDAQ Composite declined.

Three S&P 500 sectors declined – Energy, Technology and Healthcare. Utility was the was the best sector with +0.7% advance followed by Real Estate and Finance at +0.6%. Broker/Dealer gained +0.9% and Banking +0.7%.

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