Morning Notes – Friday August 4, 2017

/ August 4, 2017

Directional Bias For The Day:

  • S&P Futures are moving up since bottoming just before Asian session open
  • Breaking above a triple top or horizontal channel; the target will be near 2481.00
  • Awaiting Non-Farm Payroll Report at 8:30 AM, which will have significant impact on early morning session trade
  • Odds are for an up day – watch for break below 2472.75 for a change of fortunes
  • Key economic data due:
    • Non-Farm Payroll Change (est. 182K) at 8:30 AM
    • Average Hourly Earnings (est. 03%) at 8:30 AM

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Tokyo and Sydney closed down; Hong Kong, Mumbai and Seoul closed up
  • European markets are mostly higher – Switzerland and STOXX 600 are down
  • Dollar index is down; USD/JPY, GBP/USD and EUR/USD are up
  • Commodities are mixed – crude oil and NatGas are down; gold, silver and copper are up
  • 10-yrs yield closed at 2.228% on August 3 down from August 2 close of 2.262%; 30-years closed at 2.806% down from 2.845%

Key Levels:

  • Critical support levels for S&P 500 are 2468.85, 2459.93 and 2450.34
  • Critical resistance levels for S&P 500 are 2477.59, 2480.38 and 2484.04
  • Key levels for eMini futures: break above 2476.00, the high of 6:30 AM on August 2 and break below 2472.75, the low of 6:00 AM

Pre-Open

  • On Thursday, at 4:00 PM, S&P future (September contract) closed at 2469.50 and the index closed at 2472.16 – a spread of about 2.75 points; futures closed at 2471.75 for the day; the fair value is -2.25
  • Pre-NYSE session open, futures price action is to the upside – at 7:45 AM, S&P 500 futures were up by +3.50; Dow by +59.00; and NASDAQ up by +9.50

Directional Bias Before Open

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

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:
  • A doji candle near the middle of the range for the last week, Friday July 28; made all time highs during the week
  • Last week’s pivot point 2472.02; R1=2484.12, R2=2496.13; S1=2460.01, S2=2447.91
  • A down week – first after three up weeks and second in last five weeks; third 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 like candle, which completely stayed within the lower shadow of Wednesday; break of either extremes will be significant
  • Last pattern was down-sloping flag in June, which was broken to the upside o July 13; the first target (100%) extension is near 2507.00; pattern before that was a horizontal channel, resulting in upside break, with a 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)
  • Breaking to the upside the upper bound of a symmetrical triangle forming since 8:00 AM on July 27; high 2480.50 and low 2457.00; 100% extension target near 2497.00
  • Higher highs and higher lows since 6:00 AM on July 28
  • Above 20-bar EMA, which is crossing above 50-bar EMA
30-Minute (e-mini future)
  • Breaking above a down trend line since 5:00 AM on August 1 high of 477.25
  • Above 20-bar EMA, which is above 50-bar EMA

Previous Session

Major U.S. indices closed mixed on Thursday, August 3. Dow Jones Industrial Average and Dow Jones Transportation Average closed up. S&P 500, NASDAQ Composite, Russell 2000, NYSE Composite and Wilshire 5000 Total Market Index closed down. DJIA closed at another high and formed another doji like candle.

Only three S&P 500 sectors – Industrials, Utility and Healthcare – were up on Thursday.

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