Morning Notes – Wednesday October 18, 2017

/ October 18, 2017

Directional Bias For The Day:

  • S&P Futures are higher
  • Moving higher since 5:30 AM; broke above a resistance at 2558.25 – double top
  • Broke above a symmetrical triangle – first target near 2563.00 and second target is near 2568.00
  • Odds are for an up day – watch for break below 2558.50 for change of fortunes
  • Key economic data due:
    • Building Permits (1.22M vs. 1.25M est.) at 8:30 AM
    • Housing Starts (1.13M vs 1.18M est.) at 8:30 AM
    • Fed’s Beige Book at 2:00 PM

Markets Around The World

  • Markets in the East closed mostly higher  – Seoul and Mumbai were down
  • European markets are mostly up – Spain is down
  • Currencies:
    Up Down
    • Dollar index
    • EUR/USD
    • USD/JPY
    • USD/CHF
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • USD/CAD
  • Commodities are mostly down
    Up Down
    • Crude Oil
    • Palladium
    • Cocoa
    • NatGas
    • Gold
    • Silver
    • Copper
    • Platinum
    • Sugar
    • Coffee
    • Cotton
  • 10-yrs yield closed at 2.332% on October 17 up from October 16 close of 2.298%; 30-years closed at 2.836% up from 2.803%

Key Levels:

  • Critical support levels for S&P 500 are 2554.78, 2552.26 and 2548.31
  • Critical resistance levels for S&P 500 are 2561.15, 2563.41 and 2567.36
  • Key levels for eMini futures: break above 2561.75, the high of 8:00 AM and break below 2558.50, the low of 6:00 AM

Pre-Open

  • On Tuesday, at 4:00 PM, S&P future (December contract) closed at 2557.25 and the index closed at 2559.36 – a spread of about 2.25 points; futures closed at 2557.00 for the day; the fair value is +0.25
  • Pre-NYSE session open, futures price action is to the upside – at 8:45 AM, S&P 500 futures were up by +4.00; Dow by +92.00; and NASDAQ by +3.75

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: 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 near doji candle with small range
  • Last week’s pivot point 2550.81; R1=2560.01, R2=2566.86; S1=2543.96, S2=2534.76; No levels were breached
  • An up week – fifth in last five weeks; seventh 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 10-week EM; above 39-week SMA and 89-week SMA
  • Confirmed uptrend
Daily
  • A small green candle following that closed at the high
  • Last pattern, a down-sloping flag in June that was broken to the upside on July 13, is re-asserted
  • Above 20-day EMA, which is above 50-day EMA; Above 100-day SMA and 200-day SMA
  • Pivot Point=2557.92; R1=2561.15, R2=2562.94; S1=2556.13, S2=2552.90; No level was breached
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Broken above a horizontal channel – nearly 12 points high – 100% extension target is near 2565.00 and the 161.8% is near 2573.00
  • Gradually drifting higher since 2:00 PM on October 9
  • Sequence of higher high and higher low since 12:00 PM September 5
  • Above rising 20-bar EMA, which is above rising 50-bar EMA
30-Minute (e-mini future)
  • Broken above a symmetrical triangle – high of 2557.75 and low of 2550.75; first up-break target is near 2563.00 and second is near 2568.00
  • Resumed a sequence of higher highs and higher lows since August 29 with few exceptions
  • Above rising 20-bar EMA, which is above a rising 50-bar EMA

Previous Session

Major U.S. indices closed mixed on Tuesday October 17. Dow Jones Industrial Average, S&P 500 and Wilshire 5000 Total Market Index closed higher. NASDAQ Composite, Dow Jones Transportation Average, Russell 2000 and NYSE Composite closed lower. The range was small and most made indecisive patterns.

  • S&P 500 Sectors
Up Down
  1. Consumer Discretionary
  2. Energy
  3. Technology (unch.)
  4. Utility
  5. Heath Care
  1. Consumer Staples
  2. Materials
  3. Industrials
  4. Finance
  5. Real Estate (unch.)

 

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