Morning Notes – Friday July 14, 2017

/ July 14, 2017

Directional Bias For The Day:

  • Futures are mixed to little changed
  • Drifting lower since July 13 9:00 PM high of 2447.25
  • Odds are for a sideways to an up day; watch for break below 2439.00 for a change of fortunes;
  • Key economic data due:
    • CPI (est. 0.1%) and Core CPI (est. 0.2%) at 8:30 AM
    • Retail Sales (est. +0.1%) and Core Retail Sales (est. 0.2%) at 8:30 AM
    • Industrial Production (est. 0.3%) and Capacity Utilization (est. 76.7%) at 9:15 AM
    • Prelim University of Michigan (est. 95.1) at 10:00 AM

Markets Around The World

  • Markets in the East closed mostly higher – Mumbai was down
  • European markets are mostly higher – U.K. and Italy are down
  • Dollar index and USD/JPY are down; GBP/USD and EUR/USD are up
  • Commodities are mostly higher – NatGas is down
  • 10-yrs yield closed at 2.348% on July 13, up from July 12 close of 2.327%; 30-years closed at 2.923% up from 2.895%

Key Levels:

  • Critical support levels for S&P 500 are 2441.69, 2435.75 and 2429.30
  • Critical resistance levels for S&P 500 are 2450.41, 2453.82 and 2457.43
  • Key levels for eMini futures: break above 2447.25, the high of 9:00 PM on July 13 and break below 2442.00, the low of 5:30 AM

Pre-Open

  • On Thursday, at 4:00 PM, S&P future (September contract) closed at 2445.25 and the index closed at 2447.83 – a spread of about 2.50 points; futures closed at 2445.50 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures price action is mixed – at 7:30 AM, S&P 500 futures were down by -0.75; Dow down by -2.00; and NASDAQ up by +4.25

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up-to-Side
  • 120-Min: Side-to-Down
  • 30-Min: Side-to-Down

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 July 7 was a red harami
  • Last week’s pivot point 2424.02; R1=2440.33, R2=2455.49; S1=2408.86, S2=2392.55
  • 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 small green candle that mostly stayed above Wednesday’s candle
  • Breaking to the upside from down sloping flag on daily timeframe since June 5 with high point made on June 19;
  • Bouncing off the upper limit of a horizontal channel that it broke above in May – high 2400.58 and low 2322.25 – 100% extension target near 2480.00
  • Above 20-day EMA; above 50-day EMA; above 100-day and 200-day
  • Uptrend under pressure
2-Hour (e-mini future)
  • Drifting up in  a narrow range since 10:00 AM on July 12
  • Above a non-standard descending triangle – start on May 31; target near 2480.00
  • Sequence of lower highs and lower lows since 2:00 PM on June 19 is broken with a new higher high
  • Above rising 20-bar EMA, which is above a rising 50-bar EMA
30-Minute (e-mini future)
  • Drifting down 9:00 PM on July 13
  • At or above flattening 20-bar EMA, which is above 50-bar EMA

Previous Session

Most major U.S. indices closed higher on Thursday. Dow Jones Transportation Average was down. Day’s range was narrow.

Three  S&P 500 sectors were down Materials, Industrials and Utility.

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