Morning Notes – Wednesday August 23, 2017

/ August 23, 2017

Directional Bias For The Day:

  • S&P Futures are lower
  • Moving down since 7:00 PM on August 22
  • Near the support, which was a broken resistance; near Fibonacci retracement levels
  • Odds are for a down day – watch for break above 2447.75 for a change of fortunes
  • Key economic data due:
    • New Home Sales (est. 611K) at 10:00 AM

Markets Around The World

  • Markets in the East closed mixed – Shanghai and Sydney closed lower; Tokyo, Mumbai and Seoul closed higher; Hong Kong was closed
  • European markets are lower
  • Dollar index, GBP/USD and USD/JPY are down; EUR/USD is up
  • Commodities are mixed – crude oil, gold, silver, sugar and cotton are higher; NatGas, copper sugar cotton and cocoa are down
  • 10-yrs yield is at 2.187% down from August 22 close of 2.215%; 30-years is at 2.761% down from 2.789%

Key Levels:

  • Critical support levels for S&P 500 are 2440.96, 233.67 and 2423.05
  • Critical resistance levels for S&P 500 are 2454.77, 2458.88 and 2465.02
  • Key levels for eMini futures: break above 2447.75, the high of 7:00 AM and break below 2439.50, the high of 12:30 PM on August 18

Pre-Open

  • On Tuesday, at 4:00 PM, S&P future (September contract) closed at 2451.25 and the index closed at 2452.51 – a spread of about 1.25 points; futures closed at 2452.75 for the day; the fair value is -1.50
  • Pre-NYSE session open, futures price action is to the downside – at 8:45 AM, S&P 500 futures were down by -9.50; Dow by -72.00; and NASDAQ by -26.75

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up-to-Side
  • 120-Min: Side-to-down
  • 30-Min: Side-to-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:
  • A large red body candle for the week ending on Friday August 18
  • Last week’s pivot point 2440.39; R1=2460.09, R2=2494.63; S1=2405.85, S2=2386.15
  • A down week – second in a row and third in last 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
  • Below 10-week EMA; above 39-week SMA and 89-week SMA
  • Confirmed uptrend, though pulling back
Daily
  • A large green candle that opened with a gap; no upper and lower shadows
  • A bearish ABCD (A=2490.87; B=2437.75; C=2474.93) pattern is underway; the 100% extension is near 2421.81 achieved; 161.8% extension is near 2388.98; need a break above 2465.02 to nullify the pattern
  • Last pattern, a down-sloping flag in June that was broken to the upside on July 13, is nullified when price broke below 2430.00;
  • At 20-day EMA and just above 50-day EMA; bouncing off 100-day SMA; above 200-day SMA
  • Uptrend under pressure
2-Hour (e-mini future)
  • Bounced off the lows to 50% retracement from August 12 high of 2488.50 and to 61.8% Fibonacci retracement from 2474.00, the double top high made on August 16
  • Lower highs and lower lows since 12:00 PM on August 8
  • Above recently rising 20-bar EMA, which just crossed over recently rising 50-bar EMA
30-Minute (e-mini future)
  • Gradual move down since the high of 2454.75 at 7:00 PM on August 22; 38.2% Fibonacci retracement from 10:00 AM August 21 low of 2415.75 is near 439.75; the 61.8% Fibonacci retracement from 5:00 AM August 22 low of 2429.25 is near 2439.00
  • Higher highs and higher lows since 10:00 AM on August 21
  • Lower lows and lower highs on a larger scale, since August 8 high
  • At/above a flattening 50-bar EMA, which is below flattening 20-bar EMA

Previous Session

Major U.S. indices closed higher on Tuesday 22 in one of the biggest rallies of the year with a large open-to-close range. The indices gapped up at the open and did not fill the gap. Also, many indices formed Morning Star pattern.

Real Estate was the only S&P 500 sector to decline.

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