Morning Notes – Monday July 24, 2017

/ July 24, 2017

Directional Bias For The Day:

  • S&P Futures are little changed to lower
  • Below a downtrend line from July 20 high
  • breaking above a descending triangle forming since 8:00 Am on July 21; double low near 2463.75; break above 2467.50 will have a target net 2474.50
  • Odds are for a sideways day with no clear direction – watch for break above 2470.50 and below 2463.50 for signs for clearer direction
  • Key economic data due:
    • Existing Home Sales (est. 5.59M) at 10:00 AM

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Hong Kong, Mumbai and Seoul were up; Tokyo and Sydney were down
  • European markets are mostly down – France and Italy are up
  • Dollar index and GBP/USD are higher; USD/JPY and EUR/USD are lower
  • Commodities are mostly higher – NatGas is lower
  • 10-yrs yield closed at 2.232% on July 21, down from July 20 close of 2.266%; 30-years closed at 2.802% down from 2.837%

Key Levels:

  • Critical support levels for S&P 500 are 2465.06, 2455.02 and 2450.34
  • Critical resistance levels for S&P 500 are 2476.94, 2477.53 and 2482.51
  • Key levels for eMini futures: break above 2470.50, the high of 6:00 PM on July 23 and break below 2463.50, the low of 5:00 AM

Pre-Open

  • On Friday, at 4:00 PM, S&P future (September contract) closed at 2469.75 and the index closed at 2472.54 – a spread of about 2.75 points; futures closed at 2469.50 for the day; the fair value is +0.25
  • Pre-NYSE session open, futures price action is little changed to lower – at 8:15 AM, S&P 500 futures were down by -2.00; Dow by -16.00; and NASDAQ by -3.50

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Side
  • 30-Min: 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:
  • Spinning top candlestick for the last week, Friday July 21, with small upper and lower shadows and above previous week’s candle
  • Last week’s pivot point 2466.83; R1=2483.33, R2=2494.11; S1=2456.05, S2=2439.55
  • An up week – third in a row and 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 green candle with almost no upper shadow and small lower shadow; emerging three day evening star pattern – a break below Wednesday’s low of 2463.85 will complete the pattern
  • Still above the flag pole of a broken down sloping flag on daily timeframe that lasted 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, 50-day EMA, 100-day and 200-day
  • Uptrend resumed
2-Hour (e-mini future)
  • Drifting down since :00 PM on July 20 forming a down-sloping flag
  • Sequence of higher highs and higher lows since 12:00 PM on June 29;
  • Above rising 50-bar EMA; below recently drooping 20-bar EMA
30-Minute (e-mini future)
  • Drifting down to sideways since 8:30 AM on July 20
  • Sequence of higher highs and higher lows since 11:00 AM on July 11
  • Below slightly down-sloping 20-bar EMA, which is below 50-bar EMA

Previous Session

Major U.S. indices closed down on Friday. S&P 500, Dow Jones Industrial Average made a 3-day evening star pattern. S&P 500, NASDAQ and Russell 2000 Wilshire 5000 Total Market Index and NYSE Composite are forming emerging evening star patterns. Dow Jones Transportation Average is declining since July 14. DJIA made a harami candle with long lower shadow. S&P 500 & NASDAQ made new highs. Russell 2000 made a spinning top candlestick with longer upper shadow. DJT made a large red candle that completed an evening star pattern.

For the week, Wilshire 5000 Total Market Index and NYSE Composite declined. Four S&P 500 sectors were up – Consumer Staples, Technology, Utility and Healthcare.

Six S&P 500 sectors were down for then week – Consumer Discretionary, Consumer Staples, Energy, Utility, Healthcare and Real Estate.

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