Morning Notes – Thursday September 7, 2017

/ September 7, 2017

Directional Bias For The Day:

  • S&P Futures are little changed
  • Moving mostly sideways since 4:00 PM on September 5
  • A symmetrical triangle is emerging on 30-minute chart with price near the upper limit; a break up would have a target near 2480.00 level
  • A horizontal channel is forming on 6-minute chart – high of 2467.25 and low of 2464.75 – price near the lower limit; break below will have target near 2461.00, which would be near the lower limit of the symmetrical triangle on 30-minute chart
  • Odds are for a sideways to an up day – watch for break below 2460.00 for a change of fortunes
  • Key economic data due:
    • Unemployment Claims (298K vs. 245k est.) at 8:30 AM
    • Revised Nonfarm Productivity (1.5% vs. 1.3% est.) at 8:30 AM
    • Revised Unit Labor Costs (0.2% vs. 0.3%) at 8:30 AM
    • IBD/TIPP Economic Optimism (est. 53.1) at 10:00 AM

Markets Around The World

  • Markets in the East closed mostly higher – Shanghai and Hong Kong were down; most trended down during the day
  • European markets are higher; Most are trending up after the open with a pullback since 6:00 AM
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • AUDUSD
    • NZD/USD
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
  • Commodities are mostly up
    Up Down
    • NatGas
    • Gold
    • Silver
    • Palladium
    • Crude Oil
    • Copper
    • Platinum
    • Sugar
    • Coffee
    • Cotton
    • Cocoa
  • 10-yrs yield closed at 2.108% on September 6 up from September 5 close of 2.070%; 30-years closed at 2.724% down from 2.688%

Key Levels:

  • Critical support levels for S&P 500 are 2459.20, 2452.82 and 2446.55
  • Critical resistance levels for S&P 500 are 2471.97, 2480.38 and 2490.87
  • Key levels for eMini futures: break above 2469.00, the high of 4:00 PM on September 6 and break below 2460.00, the low of 3:30 AM

Pre-Open

  • On Wednesday, at 4:00 PM, S&P future (September contract) closed at 2465.25 and the index closed at 2465.54 – a spread of about 0.50 points; futures closed at 2465.50 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures price action is little changed – at 7:30 AM, S&P 500 futures were down by -0.25; Dow down by -12.00; and NASDAQ up by +1.75

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up-to-Side
  • 120-Min: Side-to-up
  • 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 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 red harami candle, almost a doji, with lower shadow smaller than upper shadow; indecisive day;
  • Bouncing off the down trend line from the high on August 8, which 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=2464.79; R1=2470.39, R2=2475.23; S1=2459.95, S2=2454.35
  • None of the support or resistance levels were breached
  • Uptrend under pressure; mostly moving sideways since June 2 between 2490.00 and 2410.00
2-Hour (e-mini future)
  • Not much change from Wednesday’s pre-open price action
  • Futures are climbing since September 5 12:00 PM low of 2445.50, which followed steep decline in previous two candles; near a resistance level
  • Lower highs and lower lows since 12:00 PM on September 1; sequence will break with a rise above 2471.25
  • At/below drooping 20-bar EMA, which is at/above flattening 50-bar EMA
30-Minute (e-mini future)
  • Mostly moving sideways since 4:30 PM on September 5;
  • Broken below an up-sloping flag; achieved first target, 100% extension, and the second, 138.2% extension
  • Above flat 20-bar EMA, which is at/above flat 50-bar EMA

Previous Session

Major U.S. indices closed higher on Wednesday September 6. Dow Jones Industrial Average, S&P 500 and NASDAQ Composite closed below the open. Most made a harami candle pattern, almost like a doji, with lower shadow smaller than upper shadows. Day’s range was small. Dow Transportation Average made a piercing candle.

Only one S&P 500 sector – Utility – was down Wednesday.

 

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