Morning Notes – Tuesday September 5, 2017

/ September 5, 2017

Directional Bias For The Day:

  • S&P Futures are lower
  • Moving up after a gap down since 6:00 PM on Sunday
  • In the middle of a up-sloping flag; a break below 2465.25 will be bearish
  • Odds are for a down to sideways day – watch for break above 2471.75 for a change of fortunes
  • Key economic data due:
    • Factory Orders (est. -3.3%) at 10:00 AM
    • IBD/TIPP Economic Optimism (Est. 53.1) at 10:00 AM

Markets Around The World

  • Markets in the East closed mostly higher – Tokyo and Seoul closed down
  • European markets are mixed – Germany, Switzerland and STOXX 600 are up; U.K. France, Spain and Italy are down
  • Currencies:
    Up Down
    • USD/CHF
    • GBP/USD
    • AUDUSD
    • NZD/USD
    • Dollar index
    • EUR/USD
    • USD/JPY
    • USD/CAD
  • Commodities are mostly up
    Up Down
    • Crude Oil
    • Gold
    • Silver
    • Copper
    • Platinum
    • Palladium
    • Sugar
    • Coffee
    • Cotton
    • Cocoa
    • Cotton
    • Cattle
    • NatGas
  • 10-yrs yield closed at 2.113% on September 1 down from August 31 close of 2.121%; 30-years closed at 2.768% up from 2.725%

Key Levels:

  • Critical support levels for S&P 500 are 2473.85, 2464.34 and 2460.31
  • Critical resistance levels for S&P 500 are 2480.38, 2486.53 and 2490.87
  • Key levels for eMini futures: break above 2470.75, the high of 3:30 AM and break below 2465.25, the low of 6:30 AM

Pre-Open

  • On Friday, at 4:00 PM, S&P future (September contract) closed at 2475.00 and the index closed at 2476.55 – a spread of about 1.50 points; futures closed at 2474.25 for the day; the fair value is +0.75
  • Pre-NYSE session open, futures price action is to the downside – at 8:30 AM, S&P 500 futures were down by -5.75; Dow by -70.00; and NASDAQ by -14.50

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up-to-Side
  • 120-Min: Side-to-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:
  • A large green body candle closing near the high for the week ending on Friday September 1; almost ten points below all time high of 2490.87 reached during the week ending on August 11
  • Last week’s pivot point 2461.71; R1=2495.22, R2=2513.89; S1=2443.04, S2=2409.53
  • An up week – second in a row and third in last five weeks; sixth in last ten weeks
  • R1 and R2 of previous week broken after two weeks; S1 and S2 have not been broken for he last two 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
  • Closed above 10-week EMA, 39-week SMA and 89-week SMA
  • Confirmed uptrend, though pulling back
Daily
  • A small shooting star with small upper shadow following four up days
  • The down trend line from the high on August 8 was broken to the upside on August 30
  • 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; the index was below 2430.00 for only one day
  • Above 20-day EMA, which is above 50-day EMA; Above 100-day SMA and 200-day SMA
  • Pivot Point=2476.93; R1=2480.00, R2=2483.46; S1=2473.47, S2=2470.40
  • R1 breached for three days; S1 untested for three days
  • Uptrend under pressure; mostly moving sideways since June 2 between 2490.00 and 2410.00
2-Hour (e-mini future)
  • Futures gapped down at the week’s open before Labor Day but got support at 2460.75, the low on August 15; rising since 6:00 PM on September 3
  • Higher highs and higher lows since 4:00 AM on August 29; sequence will break with a fall below 2460.75
  • At flattening 20-bar EMA, which is above rising 50-bar EMA
30-Minute (e-mini future)
  • Forming an up-sloping flag after a gap down open for the week; rising since 6:00 PM on September 3; still below the close on Friday
  • Break below 2465.25, the low of flag, will be bearish; first target, 100% extension, is near 2451.00, the second, 138.2% extension, is near 2444.25 and the third, 161.8% extension, is near 2439.75
  • At flattening 20-bar EMA and 50-bar EMA

Previous Session

Major U.S. indices closed higher on Friday 1, a day before the Labor Day weekend. S&P 500, Dow Transportation Average and Wilshire 5000 Total Market Index were up for sixth day, NASDAQ was up for fifth day, Dow Jones Industrial Average was up for fourth day, Russell 2000 climbed for seventh day and NYSE Composited for third day.

Three S&P 500 sectors – Technology, Utility and Health Care – were down on Friday. Real Estate was unchanged.

For the week major US indices advanced following a gain in previous week. Two S&P 500 sectors – Finance and Utility – were down for the week.

 

 

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