Morning Notes – Tuesday July 25, 2017

/ July 25, 2017

Directional Bias For The Day:

  • S&P Futures are higher
  • Moving up since 3:00 AM
  • Earnings are primary driver
  • Odds are for an up day – watch for break below 2470.25 for signs for a change of fortunes
  • Key economic data due:
    • Conference Board Consumer Confidence (est. 116.5) at 10:00 AM

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Tokyo, Mumbai and Seoul were down; Hong Kong and Sydney were up
  • European markets are higher
  • Dollar index is down; GBP/USD, USD/JPY and EUR/USD are higher
  • Commodities are mixed – crude oil, NatGas and copper are higher; gold and silver are lower
  • 10-yrs yield closed at 2.254% on July 24, up from July 21 close of 2.232%; 30-years closed at 2.833% up from 2.802%

Key Levels:

  • Critical support levels for S&P 500 are 2466.32, 2455.02 and 2450.34
  • Critical resistance levels for S&P 500 are 2477.62, 2480.01 and 2483.33
  • Key levels for eMini futures: break above 2476.25, the high of 8:30 AM on July 20 and break below 2470.25, the low of 5:30 AM

Pre-Open

  • On Monday, at 4:00 PM, S&P future (September contract) closed at 2469.00 and the index closed at 2469.91 – a spread of about 1.00 points; futures closed at 2468.50 for the day; the fair value is +0.50
  • Pre-NYSE session open, futures price action is to the upside – at 8:15 AM, S&P 500 futures were up by +6.50; Dow by +110.00; and NASDAQ by +7.25

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 near dragonfly doji with small lower shadow
  • 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)
  • Breaking above a down-sloping flag; first target is near 2496.00
  • Sequence of higher highs and higher lows since 12:00 PM on June 29;
  • Above rising 20-bar EMA, which is above 50-bar EMA
30-Minute (e-mini future)
  • Moving higher since 3:00 AM after a sideways move from 8:30 AM on July 21
  • broken above an ascending triangle – 100% extension target near 2078.25 and 161.8% extension is near 2483.00
  • Sequence of higher highs and higher lows since 11:00 AM on July 11
  • Above up-sloping 20-bar EMA, which is above 50-bar EMA

Previous Session

Major U.S. indices closed mixed on Monday, July 24. S&P 500, Dow Jones Industrial Average, Dow Jones Transportation Average and NYSE Composite were down. NASDAQ Composite, Russell 2000 and Wilshire 5000 Total Market Index were up.

The day’s range was small. S&P 500 made a doji. DJIA closed near the lows and off the highs. NASDAQ’s candle was opposite of DJIA. Russelll 2000 made a dragonfly candle and DJT made a near bullish engulfing pattern.

NASDAQ, S&P 500, NYSE and Wilshire are showing upward pressure. DJT is showing downward pressure. DJIA and Russell are undecided. The market indices are giving conflicting signal and it is not clear which one is going to lead.

 

Only two S&P 500 sectors were up – Finance and Technology.

 

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