Morning Notes – Wednesday July 26, 2017

/ July 26, 2017

Directional Bias For The Day:

  • S&P Futures are higher
  • Moving up since 0:00 AM
  • Early morning earnings are mostly above estimates
  • Odds are for an up day – watch for break below 2475.50 for signs for a change of fortunes
  • Key economic data due:
    • New Home Sales (est. 615K) at 10:00 AM
    • FOMC Statement and Fed Funds Rate at 2:00 PM

Markets Around The World

  • Markets in the East closed mostly higher – Seoul was down
  • European markets are higher
  • Dollar index and GBP/USD are higher; USD/JPY and EUR/USD are lower
  • Commodities are mixed – crude oil and copper are higher; NatGas, gold and silver are lower
  • 10-yrs yield closed at 2.326% on July 25, up from July 24 close of 2.254%; 30-years closed at 2.910% up from 2.833%

Key Levels:

  • Critical support levels for S&P 500 are 2474.91, 2466.32 and 2455.02
  • Critical resistance levels for S&P 500 are 2480.61, 2484.09 and 2486.94
  • Key levels for eMini futures: break above 2478.75, the high of 12:00 PM on July 25 and break below 2475.50, the low of 4:00 AM

Pre-Open

  • On Tuesday, at 4:00 PM, S&P future (September contract) closed at 2473.75 and the index closed at 2477.13 – a spread of about 3.50 points; futures closed at 2474.00 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures price action is to the upside – at 8:00 AM, S&P 500 futures were up by +4.00; Dow by +59.00; and NASDAQ by +6.25

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:
  • 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 small candle that gapped up and the gap was not filled
  • Last pattern was 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
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Continue the break above a down-sloping flag after a brief dip to 20-bar EMA; 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 0:30 AM after a brief dip to 50-bar EMA from high of 2478.75 on July 25 at 12:00 PM
  • Last pattern broken was an ascending triangle – 100% extension target near 2078.25 is achieved 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 higher on Tuesday, July 25. Most made all time highs. Dow Jones Industrial Average missed it by little and Dow Jones Transportation Average is still off its high.

Four S&P 500 sectors were down – Industrial, Technology, Utility and Healthcare. Real Estate was unchanged.

 

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