Morning Notes – Thursday October 19, 2017

/ October 19, 2017

Directional Bias For The Day:

  • S&P Futures are lower
  • Moving lower since 2:00 PM on October 18; new leg down 2:00 AM; bounced to 38.6% Fibonacci retracement level
  • Odds are for a down day – watch for break above 2552.50 for change of fortunes
  • Key economic data due:
    • Unemployment Claims (227K vs. 240K est.) at 8:30 AM
    • Philly Fed Manufacturing Index (27.9 vs. 21.9 est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly lower – Tokyo and Sydney were up; Mumbai was closed
  • European markets are down – the downtrend stated for the last few days for some and gained speed since this morning; still near the highs
  • Currencies:
    Up Down
    • EUR/USD
    • AUD/USD
    • USD/CAD
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • NZD/USD
  • Commodities are mostly down
    Up Down
    • Gold
    • Silver
    • Sugar
    • Coffee
    • Cotton
    • Cocoa
    • Crude Oil
    • NatGas
    • Copper
    • Palladium
    • Platinum
  • 10-yrs yield is at 2.307% down from October 18 close of 2.339%; 30-years is at 2.821% up from 2.850%

Key Levels:

  • Critical support levels for S&P 500 are 2559.76, 2554.78 and 2552.26
  • Critical resistance levels for S&P 500 are 2564.11, 2566.12 and 2568.13
  • Key levels for eMini futures: break above 2551.50, the high of 5:30 AM and break below 2544.25, the low of 7:00 AM

Pre-Open

  • On Wednesday, at 4:00 PM, S&P future (December contract) closed at 2559.50 and the index closed at 2561.26 – a spread of about 1.75 points; futures closed at 2560.00 for the day; the fair value is -0.50
  • Pre-NYSE session open, futures price action is to the downside – at 8:30 AM, S&P 500 futures were down by -12.50; Dow by -104.00; and NASDAQ by -39.50

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Side
  • 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 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 red doji candle
  • 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=2561.68; R1=2563.69, R2=2566.12; S1=2559.25, S2=2557.24; R1/R2 were breached
  • Confirmed Uptrend
2-Hour (e-mini future)
  • On October 19, the 2:00 AM candle dropped below a horizontal channel that was broken to the upside on October 17; bouncing near the lower limit of the channel and now at the its middle
  • Broken below the 50-bar EMA; closed below it for the first time since 10:00 PM on September 26
  • Sequence of higher high and higher low since 12:00 PM September 5 broken
  • Below recently drooping 20-bar EMA, which is above drooping 50-bar EMA
30-Minute (e-mini future)
  • Declined from a high of 2562.25 at 9:00 AM on October 18 to a low of 2542.50 at 4:0 AM on October 19; bounced to the 38.6% Fibonacci retracement by 5:30 Am and since drifting down
  • Below falling 20-bar EMA, which is below a falling 50-bar EMA

Previous Session

Major U.S. indices closed higher on Wednesday October 18. Most also made all time highs. Dow Jones Transportation Average and Russell 2000 did not.

Dow Jones Industrial Average gapped up and closed near the high for the day. S&P 500 and NASDAQ Composite closed below their open.

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

 

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