Morning Notes – Tuesday July 18, 2017

/ July 18, 2017

Directional Bias For The Day:

  • Futures are lower
  • Drifting lower since 4:30 AM high of 2460.50
  • Trading within a narrow band – between 2461.25 and 2454.00 – since 1:30 PM on July 14
  • Odds are for a sideways to a down day; watch for break above 2460.50 a change of fortunes;
  • Key economic data due:
    • Import Prices (est. -0.2%) at 8:30 AM

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Hong Kong and Seoul were up; Tokyo, Sydney and Mumbai were down
  • European markets are mostly lower – Switzerland is higher
  • Dollar index, USD/JPY and GBP/USD are down; EUR/USD is up
  • Commodities are mostly higher – copper is down
  • 10-yrs yield closed at 2.309% on July 17, down from July 14 close of 2.319%; 30-years closed at 2.893% down from 2.910%

Key Levels:

  • Critical support levels for S&P 500 are 2457.16, 2446.69 and 2441.69
  • Critical resistance levels for S&P 500 are 2463.54, 2465.37 and 2467.91
  • Key levels for eMini futures: break above 2460.50, the high of 4:30 AM and break below 2454.25, the low of 9:30 PM on July 17

Pre-Open

  • On Monday, at 4:00 PM, S&P future (September contract) closed at 2456.50 and the index closed at 2459.14 – a spread of about 2.75 points; futures closed at 2458.50 for the day; the fair value is -0.50
  • Pre-NYSE session open, futures price action is to the downside – at 8:00 AM, S&P 500 futures were down by -1.50; Dow by -3.00; and NASDAQ by -5.00

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 July 14 was bullish engulfing pattern; breaking out to the upside
  • Last week’s pivot point 2445.20; R1=2477.61, R2=2495.95; S1=2426.86, S2=2394.45
  • An up week – second in a row and fourth 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 near doji harami candle
  • Breaking to the upside from down sloping flag on daily timeframe since June 5 with high point made on June 19; breaking above the flag pole
  • 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 resumed
2-Hour (e-mini future)
  • Sideways move since 2:00 PM on July 14
  • Sequence of higher highs and higher lows since 12:00 PM on June 29;
  • At 20-bar EMA, which is above a rising 50-bar EMA
30-Minute (e-mini future)
  • Drifting side ways since 1:30 PM on July 14 – high 2461.25 and low 2454.00
  • Sequence of higher highs and higher lows since 11:00 AM on July 11
  • At flattening 20-bar EMA, which is above 50-bar EMA

Previous Session

Major U.S. indices closed mixed on Monday. NASDAQ Composite, Russell 2000 and Wilshire 5000 Total Market Index were higher. S&P 500, Dow Jones industrial Average, Dow Jones Transportation Average and NYSE Composite were lower.

Four  S&P 500 sectors were down – Energy (-0.1%), Industrial (-0.1%), Finance (-03%) and Healthcare (-04%).

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