Morning Notes – Tuesday August 15, 2017

/ August 15, 2017

Directional Bias For The Day:

  • S&P Futures are higher
  • Uptrend since the low of 2430.25 at 7:30 AM on August 11; above 61.8% Fibonacci  retracement
  • Near resistance 2474.50, the high at 4:30 PM on August 9
  • Odds are for an up day – watch for break below 2461.00 for a change of fortunes
  • Key economic data due:
    • Retail Sales (est. 0.3%) and Core Retail Sales (est. 0.3%) at 8:30 AM
    • Empire State Manufacturing Index (est. 10.1) at 8:30 AM
    • Import Prices (est. 0.1%) at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly higher; Hong Kong Was down; Mumbai and Seoul were closed
  • European markets are mostly up – Italy is closed and Switzerland is down
  • Dollar index, and USD/JPY are up; EUR/USD and GBP/USD are down
  • Commodities are mostly down – copper is unchanged
  • 10-yrs yield closed at 2.219% on August 14 up from August 11 close of 2.189%; 30-years is at 2.805% up from 2.787%

Key Levels:

  • Critical support levels for S&P 500 are 2454.96, 2448.09 and 2437.75
  • Critical resistance levels for S&P 500 are 2468.22, 2474.41 and 2490.87
  • Key levels for eMini futures: break above 2473.25, the high of 9:30 PM on August 14 and break below 2465.25, the low of 4:00 AM

Pre-Open

  • On Monday, at 4:00 PM, S&P future (September contract) closed at 2463.50 and the index closed at 2465.84 – a spread of about 1.25 points; futures closed at 2463.50 for the day; the fair value is +0.00
  • Pre-NYSE session open, futures price action is to the upside – at 7:15 AM, S&P 500 futures were up by +6.50; Dow by +65.00; and NASDAQ by +18.50

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Side-to-Up
  • 30-Min: Side-to-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:
  • A large red candle after few weeks doji candles the week ending on August 11
  • Last week’s pivot point 2456.65; R1=2475.54, R2=2509.77; S1=2422.42, S2=2403.53
  • A down week, second in five weeks; fourth 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
  • At 10-week EMA; above 39-week SMA and 89-week SMA
  • Confirmed uptrend, though pulling back
Daily
  • A green candle with gap and almost no upper and lower shadows
  • Last pattern was down-sloping flag in June; was broken to the upside on July 13; the first target (100%) extension is near 2507.00; pattern will be relevant is futures do not fall below 2430.00
  • Pattern before that was a horizontal channel, resulting in upside break, with a 100% extension target near 2480.00, which was achieved on August 8
  • At 20-day EMA; at 50-day EMA; above 100-day and 200-day
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Continuing the bounce from Thursday-Friday’s low to resistance made by 2474.50, the August 9 high
  • Sequence of lower highs and lower lows since 12:00 PM high on August 8 with one exception
  • Above rising 20-bar EMA, which is above recently rising 50-bar EMA
30-Minute (e-mini future)
  • Bounced up past 61.8% Fibonacci retracement of the decline on Thursday August 10; nearing 78.6% level
  • Higher highs and higher lows since the low of 2434.00 at 7:30 AM n August 11; lower lows and lower highs on a larger scale, since August 8 high
  • Targets from last week’s bearish pattern were achieved
  • At/above a rising 20-bar EMA, which is above rising 50-bar EMA

Previous Session

Major U.S. indices closed higher on Monday, August 14 after a gap-up open, which was not filled during the day. By the end of the day, most indices closed above Thursday’s high. MNYSE Composite was the lone exception. Dow Jones Transportation Average is making the most bullish pattern. Russell 2000 made a 3-day morning star pattern.

Energy was the only down S&P 500 sector.

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