Morning Notes – Thursday June 29, 2017

/ June 30, 2017

Directional Bias For The Day:

  • Futures are little changed
  • S&P 500 futures are up by +7.00 points at 8:00 AM but gave that up by 9:00 AM
  • Odds are for a sideways to down day watch for break above 2445.00 for a change of fortunes
  • Key economic data due:
    • Final GDP (1.4% vs. 1.2% est.) at 8:30 AM
    • Unemployment Claims (244K vs. 241K) at 8:30 AM

Markets Around The World

  • Markets in the East closed higher
  • European markets are mostly down – U.K. is up
  • Dollar index is down; USD/JPY, GBP/USD and EUR/USD are up
  • Commodities are mixed – crude oil, NatGas and copper are higher; gold and silver are lower
  • 10-yrs yield is at 2.277% up from June 28 close of 2.221%; 30-years is at 2.826% up from 2.774%

Key Levels:

  • Critical support levels for S&P 500 are 2439.35, 2428.02 and 2419.96
  • Critical resistance levels for S&P 500 are 2444.26, 2450.42 and 2453.82
  • Key levels for eMini futures: break above 2444.75, the high of 7:30 AM and break below 2437.00, the low of 4:00 PM on June 28

Pre-Open

  • On Wednesday, at 4:00 PM, S&P future (September contract) closed at 2437.75 and the index closed at 2440.69 – a spread of about 3.00 points; futures closed at 2438.50 for the day; the fair value is -0.75
  • Pre-NYSE session open, futures price action is mixed – at 8:30 AM, S&P 500 futures were up by +0.50; Dow up by +7.00; and NASDAQ down by -34.50

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 green 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
  • Below 20-day but above 50-day EMA, 100-day and 200-day
  • Confirmed uptrend
2-Hour (e-mini future)
  • Bounce off from just below June 15 low of 2416.25 hit the down trend line from June 19 high at 2:00 AM ;
  • Sequence of higher highs and higher lows since 10:00 AM on June 12 broken
  • Above rising 20-bar EMA, which is above rising 50-bar EMA
30-Minute (e-mini future)
  • Forming triple top near 2445.00-2445.50; break below 2439.00 will complete the pattern; another support at 2436.75
  • Higher high and higher lows since 4:00 AM on June 28
  • Just falling below recently flattening 20-bar EMA; above rising 50-bar EMA

Previous Session

Major U.S. indices advanced on Wednesday June 28. Most of them recovered the losses of Tuesday. NASDAQ Composite was the only exception. Indices gapped up at the open and most maintained that gap. NASDAQ was the only major index that tested Tuesday’s low. To get out of current short term trend, S&P 500 has to rise above 2450.42 to resume the uptrend.

Russell 2000 was the best performer with +1.5% gains followed by NASDAQ and Transports at 1.4%.

Only one S&P 500 sector, Utility, had a negative day. The best performers were Finance (+1.6%), Technology (+1.3%) and Discretionary (+1.0%).

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