Morning Notes – Friday July 21, 2017

/ July 21, 2017

Directional Bias For The Day:

  • S&P Futures are little changed to lower
  • Drifting lower since making a high of 2475.25 at 5:00 AM
  • Odds are for a sideways to down day; watch for break above 2475.25 for a change of fortunes;
  • No Key economic data due:

Markets Around The World

  • Markets in the East closed mostly lower – Mumbai and Seoul were up
  • European markets are lower
  • Dollar index and USD/JPY are lower; GBP/USD and EUR/USD are higher
  • Commodities are mixed – crude oil and NatGas are lower; gold, silver and copper are higher
  • 10-yrs yield closed at 2.266% on July 20, down from July 19 close of 2.268%; 30-years closed at 2.837% down from 2.845%

Key Levels:

  • Critical support levels for S&P 500 are 2468.43, 2463.85 and 2455.02
  • Critical resistance levels for S&P 500 are 2477.62, 2482.36 and 2487.09
  • Key levels for eMini futures: break above 2475.25, the high of 5:00 AM and break below 2469.25, the low of 6:30 AM

Pre-Open

  • On Thursday, at 4:00 PM, S&P future (September contract) closed at 2471.50 and the index closed at 2473.45 – a spread of about 2.00 points; futures closed at 2471.25 for the day; the fair value is +0.25
  • Pre-NYSE session open, futures price action is little changed to lower – at 8:00 AM, S&P 500 futures were down by -0.25; Dow by -24.00; and NASDAQ by -11.50

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Up
  • 30-Min: Up

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 red doji candle above previous candle’s real body
  • 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, 50-day EMA, 100-day and 200-day
  • Uptrend resumed
2-Hour (e-mini future)
  • Mostly moving sideways since 4:00 PM on July 19
  • 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)
  • Moving sideways since 6:00 PM on July 19;
  • Sequence of higher highs and higher lows since 11:00 AM on July 11
  • Below flattening 20-bar EMA, which is above 50-bar EMA

Previous Session

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

Four S&P 500 sectors were up – Consumer Staples, Technology, Utility and Healthcare.

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