Morning Notes – Tuesday October 31, 2017

/ October 31, 2017

Directional Bias For The Day:

  • S&P Futures are higher
  • Drifting higher since 8:30 PM on October 30; at a down trend line from the high of 2580.75 on October 27
  • Odds are for an up to sideways day – watch for break above 2575.00 and below 2471.00 for change of fortunes
  • Key economic data due:
    • Employment Cost Index (0.7% vs. 0.7% est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly lower –  Shanghai and Seoul were up
  • European markets are mostly higher – Italy is down; Germany is closed
  • Currencies:
    Up Down
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • EUR/USD
    • AUD/USD
    • NZD/USD
  • Commodities are mostly down
    Up Down
    • Platinum
    • Palladium
    • Crude Oil
    • NatGas
    • Gold
    • Silver
    • Copper
    • Sugar
    • Coffee
    • Cotton
    • Cocoa
  • 10-yrs yield closed at 2.370% on October 30 down from October 27 close of 2.428%; 30-years closed at 2.880% down from 2.936%

Key Levels:

  • Critical support levels for S&P 500 are 2568.25, 2565.94 and 2559.80
  • Critical resistance levels for S&P 500 are 2580.03, 2582.98 and 2585.48
  • Key levels for eMini futures: break above 2573.75, the high of 7:30 AM and break below 2571.25, the low of 7:00 AM

Pre-Open

  • On Monday, at 4:00 PM, S&P future (December contract) closed at 2569.00 and the index closed at 2572.83 – a spread of about 2.75 points; futures closed at 2568.25 for the day; the fair value is -0.75
  • Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up by +5.00; Dow by +29.00; and NASDAQ by +24.00

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Up-to-Side
  • 30-Min: Up-to-Side

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 close to all time high;
  • Last week’s pivot point 2569.35; R1=2594.70, R2=2608.33; S1=2555.72, S2=2530.37; S1 was breached after three weeks
  • An up week – seventh in last five weeks; ninth 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 harami candle with large body green candle that gapped up from previous one
  • 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=2573.70; R1=2579.16, R2=2585.48; S1=2567.38, S2=2561.92; S1 was breached
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Drifting lower since the high of 2580.75 was made at 2:00 PM on October 27; bouncing off the 20-bar EMA
  • In a horizontal channel – high of 2577.25 and low near 2542.50; approaching the upper limit after a brief retreat from it
  • Sequence of lower highs and lower lows since 6:00 PM October 22 has broken; a new reverse sequence hasn’t yet established
  • Above flattening 20-bar EMA, which is above flattening 50-bar EMA
30-Minute (e-mini future)
  • Slight upward move since 12:00PM on October 30; nearing the down trend line form the high of 2580.75 on October 27
  • Above a recently rising 20-bar EMA, which is crossing above a recently rising 50-bar EMA

Previous Session

Major U.S. indices declined on Monday October 30. S&P 500 declined for the third times on Monday in last five weeks. It was up four times on Friday during this period.

S&P 500 and Wilshire 5000 Total Market Index made a red harami candle within a large green candle. NASDAQ Composite made a harami doji near Friday’s close. Russell 2000 made a bearish engulfing pattern.

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

 

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