Morning Notes – Thursday July 27, 2017

/ July 27, 2017

Directional Bias For The Day:

  • S&P Futures are higher
  • Moving up since 3:30 PM on July 26; made triple top at 3:00 AM
  • Odds are for an up day – watch for break below 2476.50 for signs for a change of fortunes
  • Key economic data due:
    • Durable Goods (est. 3.5%) and Core Durable Good (est. 0.4%) at 8:30 AM
    • Unemployment Claims (est. 240k) at 8:30 AM

Markets Around The World

  • Markets in the East closed higher
  • European markets are mixed – Germany, U.K., Spain and STOXX 600 are down; France, Italy and Switzerland are up
  • Dollar index, USD/JPY, and GBP/USD are higher; EUR/USD is lower
  • Commodities are mixed – crude oil and NatGas are lower; gold, silver and copper are higher
  • 10-yrs yield closed at 2.283% on July 26, down from July 25 close of 2.326%; 30-years closed at 2.891% down from 2.910%

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 2481.69, 2484.90 and 2488.12
  • Key levels for eMini futures: break above 2480.00, the high of 3:00 AM and break below 2476.50, the low of 2:30 AM

Pre-Open

  • On Wednesday, at 4:00 PM, S&P future (September contract) closed at 2474.75 and the index closed at 2477.83 – a spread of about 3.00 points; futures closed at 2473.25 for the day; the fair value is +1.50
  • Pre-NYSE session open, futures price action is to the upside – at 7:45 AM, S&P 500 futures were up by +4.25; Dow by +16.00; and NASDAQ by +34.00

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, a near doji, that did not fill the gap created on Tuesday
  • 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)
  • Pre-open price action is similar to that on yesterday
  • 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)
  • An emerging broadening pattern since July 25 morning – two touches to upper limit and three touches to lower limit
  • Moving higher since 3:30 PM July 26 low of 2471.50
  • 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
  • At up-sloping 20-bar EMA, which is above 50-bar EMA

Previous Session

Major U.S. indices closed mixed on Wednesday, July 26. Most made all time highs. Russell 2000 declined and made a dark cloud cover candlestick pattern. Wilshire 5000 Total Market Index made a three-day evening star pattern. The day’s range was small and many indices made dojis.

Five S&P 500 sectors were up – Energy, Industrial, Technology, Utility and Real Estate.

 

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