Morning Notes – Thursday October 26, 2017

/ October 26, 2017

Directional Bias For The Day:

  • S&P Futures are higher
  • Moving mostly higher since 12:30 on October 25
  • Near a resistance zone – prior support that was broken,  and down trend nd 61.8% Fibonacci retracement level of the decline
  • Odds are for an up to sideways day – watch for break above 2563.00 and below 2456.25 for change of fortunes
  • Key economic data due:
    • Unemployment Claims (233K vs. 235K est.) at 8:30 AM
    • Pending Home Sales (est. 0.2%) at 10:00 AM

Markets Around The World

  • Markets in the East closed mostly higher –  Hong Kong and Seoul were down
  • European markets are mostly higher – most are rising since 11:00 AM on October 25
  • Currencies:
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
  • Commodities are mostly down
    Up Down
    • Crude Oil
    • Silver
    • Palladium
    • Sugar
    • Cocoa
    • NatGas
    • Gold
    • Copper
    • Platinum
    • Coffee
    • Cotton
  • 10-yrs yield is at 2.432% down from October 25 close of 2.444%; 30-years is at 2.944% up from 2.955%

Key Levels:

  • Critical support levels for S&P 500 are 2553.34, 2544.00 and 2541.60
  • Critical resistance levels for S&P 500 are 2559.65, 2572.18 and 2578.29
  • Key levels for eMini futures: break above 2563.00, the high of 7:30 AM and break below 2556.25, the low of 5:30 AM

Pre-Open

  • On Wednesday, at 4:00 PM, S&P future (December contract) closed at 2554.75 and the index closed at 2557.15 – a spread of about 2.50 points; futures closed at 2558.50 for the day; the fair value is -3.75
  • Pre-NYSE session open, futures price action is to the upside – at 7:30 AM, S&P 500 futures were up by +3.25; Dow by +34.00; and NASDAQ by +9.25

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Up-to-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 large green candle with small lower shadow and no upper shadow; breaking away from previous candle
  • Last week’s pivot point 2566.19; R1=2584.46, R2=2593.71; S1=2556.94, S2=2538.67; R1/R2 were breached
  • An up week – sixth in last five weeks; eight 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 red candle; almost like a hammer; lower shadow is almost 1.5 times the real body with no upper shadow
  • 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=2556.18; R1=2568.37, R2=2579.58; S1=2544.97, S2=2532.78; S1/S2/S3 were breached
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Broke below the upper limit of a horizontal channel that was broken on October 19; bounced off the lower limit of the channel
  • Broke below the 50-bar EMA and now back near it
  • Sequence of lower highs and lower lows since 6:00 PM October 22
  • At/below flattening 20-bar EMA, which is at/below flattening 50-bar EMA
30-Minute (e-mini future)
  • Drifting up since the sharp decline on October 25 that breached the lower limit of a down sloping flag; near a resistance zone, which was a prior support, and trying the break above a down trend line since the high of 9:00 AM on October 23
  • Above flat 20-bar EMA, which is at/below flat 50-bar EMA

Previous Session

Major U.S. indices declined Wednesday October 25. However, most made a recovery during the final few minutes of the trading session resulting in near reversal candlestick patterns. S&P 500, NASDAQ Composite, Wilshire 5000 Total Market Index, Russell 2000 and Dow Jones Transportation Average made red hammer candles.

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

 

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