Morning Notes – Wednesday June 28, 2017

/ June 28, 2017

Directional Bias For The Day:

  • Futures are higher
  • S&P 500 futures are up by 13.50 from 4:00 AM low of 2413.75
  • Near resistance formed by previously broken support at 2428.00 and by a down trend line from the high of 9:30 AM on June 26
  • A strong support is at 2412.50, the low of 2:00 PM on June 9
  • Odds are for an up day if the resistance is broken otherwise it could be range bound
  • Key economic data due:
    • Pending Home Sales (est. 0.9%) at 10:00 AM

Markets Around The World

  • Markets in the East were mostly down – Sydney was up
  • European markets are mostly lower – U.K. and Italy are higher
  • Dollar index and USD/JPY are down; GBP/USD and EUR/USD are up
  • Commodities are mostly higher – crude oil is lower
  • 10-yrs yield closed at 2.198% on June 27 up from June 26 close of 2.137%; 30-years closed at 2.744% up from 2.696%

Key Levels:

  • Critical support levels for S&P 500 are 2415.70, 2403.59 and 2386.92
  • Critical resistance levels for S&P 500 are 2440.15, 2450.42 and 2453.82
  • Key levels for eMini futures: break above 2429.25, the low of 9:30 AM on June 27 and break below 2421.25, the low of 6:15 AM

Pre-Open

  • On Tuesday, at 4:00 PM, S&P future (September contract) closed at 2417.25 and the index closed at 2419.38 – a spread of about 2.25 points; futures closed at 2420.50 for the day; the fair value is -3.25
  • Pre-NYSE session open, futures price action is to the up side – at 8:00 AM, S&P 500 futures were up by +3.50; Dow by +15.00; and NASDAQ is down by -0.50

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 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 relatively large red real body candle with small upper shadow and almost no lower shadow
  • Above a horizontal channel – high 2400.58 and low 2322.25 – 100% extension target near 2480.00
  • Belo 20-day but above 50-day EMA, 100-day and 200-day
  • Confirmed uptrend
2-Hour (e-mini future)
  • Broken below a narrow up-sloping flag but within a broadening patter; bouncing off from just below June 15 low of 2416.25;
  • Sequence of higher highs and higher lows since 10:00 AM on June 12 broken
  • Below falling 20-bar EMA, which is below 50-bar EMA
30-Minute (e-mini future)
  • Bouncing off low of 2413.75 made by 4:00 AM candle, which also made TCLOS pattern
  • Lower high and lower lows since 9:30 AM on June 26
  • Above recently rising 20-bar EMA; at still falling 50-bar EMA

Previous Session

Major U.S. indices declined sharply on Tuesday June 27. Market was under pressure at the open and an early session attempt to go higher fizzled and indices declined in the afternoon.

NASDAQ Composite, with -1.6% decline, was the biggest loser. It was followed by Russell 2000, which declined -0.9%, and S&P 500, which lost -0.8%. The NYSE advancing issues were only 0.54% of the declining issues.

Only one S&P 500 sector, Finance, had a positive day. The worst performers were Technology (-1.6%)Utilities (-1.1%) and Healthcare (-0.9%).

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