Morning Notes – Wednesday July 19, 2017

/ July 19, 2017

Directional Bias For The Day:

  • S&P Futures are higher
  • Drifting sideways since 4:00 PM on July 18
  • Trading within a narrow band – between 2461.00 and 2457.75
  •  Odds are for a sideways to an up day; watch for break below 2457.75 for a change of fortunes;
  • Key economic data due:
    • Building Permits (est. 1.20M) and Housing Starts (est. 1.16M) at 8:30 AM

Markets Around The World

  • Markets in the East closed higher
  • European markets are mostly higher – Spain and Italy are down
  • Dollar index and USD/JPY are higher; GBP/USD and EUR/USD are lower
  • Commodities are mostly lower – crude oil is higher
  • 10-yrs yield closed at 2.263% on July 18, down from July 17 close of 2.309%; 30-years closed at 2.851% down from 2.893%

Key Levels:

  • Critical support levels for S&P 500 are 2450.34, 2446.69 and 2441.69
  • Critical resistance levels for S&P 500 are 2463.54, 2467.87 and 2474.82
  • Key levels for eMini futures: break above 2461.00, the high of 10:30 PM on July 18 and break below 2457.75, the low of 6:00 PM on July 18

Pre-Open

  • On Tuesday, at 4:00 PM, S&P future (September contract) closed at 2458.00 and the index closed at 2460.61 – a spread of about 2.75 points; futures closed at 2457.75 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures price action is mixed – at 7:45 AM, S&P 500 futures were up by +1.50; Dow down by -2.00; and NASDAQ up by +11.75

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 green hammer candle that is very close to all time high; a break above Tuesday’s high of 2460.92 would be bullish
  • 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)
  • Back up to the highs after a dip at session open on Tuesday, which tested the support made by the highs of June 26;
  • Sideways move since 2:00 PM on July 14 -0 the range has increased
  • Sequence of higher highs and higher lows since 12:00 PM on June 29;
  • Above 20-bar EMA, which is above a rising 50-bar EMA
30-Minute (e-mini future)
  • Drifting side ways since 4:00 PM on July 18 – high 2461.00 and low 2458.25
  • 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 Tuesday. S&P 500, NASDAQ Composite and Wilshire 5000 Total Market Index were higher. Russell 2000, Dow Jones industrial Average, Dow Jones Transportation Average and NYSE Composite were lower.

NASDAQ made a bullish engulfing, S&P 500 made a hammer candlestick and Dow Jones Industrial Average made a dragonfly candle.

Five S&P 500 sectors were down – Energy, Materials, Industrial, Finance (-03%) and Real Estate. Consumer Staples was unchanged.

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