Morning Notes – Thursday November 2, 2017

/ November 2, 2017

Directional Bias For The Day:

  • S&P Futures are little changed
  • Drifting higher since 8:30 PM on November 1 low of 2563.25; up more than 12 points from lows
  • Odds are for a sideways to down day – watch for break above 2578.50 and below 2570.75  for change of fortunes
  • Key economic data due:
    • Unemployment Claims (229K vs. 235K est.) at 8:30 AM
    • Prelim Nonfarm Productivity (3.,0% vs. 2.5% est.) at 8:30 AM
    • Prelim Unit Labor Costs (0.5% vs. 0.5% est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly lower – Tokyo was up
  • European markets are mostly lower – U.K., Italy and STOXX 600 are up; most are declining since November 1 morning
  • Currencies:
    Up Down
    • EUR/USD
    • AUD/USD
    • NZD/USD
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • USD/CAD
  • Commodities are mostly down
    Up Down
    • NatGas
    • Palladium
    • Coffee
    • Cotton
    • Crude Oil
    • Gold
    • Silver
    • Copper
    • Platinum
    • Sugar
    • Cocoa
  • 10-yrs yield closed at 2.376% on November 1 unchanged from October 31 close of 2.376%; 30-years closed at 2.862% down from 2.875%

Key Levels:

  • Critical support levels for S&P 500 are 2574.92, 2568.25 and 2565.94
  • Critical resistance levels for S&P 500 are 2588.40, 2594.37 and 2600.35
  • Key levels for eMini futures: break above 2574.50, the high of 7:00 AM and break below 2570.75, the low of 6:30 AM

Pre-Open

  • On Wednesday, at 4:00 PM, S&P future (December contract) closed at 2576.00 and the index closed at 2579.36 – a spread of about 3.25 points; futures closed at 2574.75 for the day; the fair value is +0.25
  • Pre-NYSE session open, futures price action is little changed – at 8:30 AM, S&P 500 futures were unchanged ; Dow up by +16.00; and NASDAQ up by +2.00

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Up-to-Side
  • 30-Min: 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 small bodied red candle that gapped up at the open but the gap was filled; a positive day but the close was below the open
  • 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=2580.89; R1=2586.87, R2=2594.37; S1=2573.39, S2=2567.41; R1/R2/R3  were breached
  • Confirmed Uptrend
2-Hour (e-mini future)
  • Fallen back inside the horizontal channel after a break above it; bouncing off from the support near 2563.25
  • Sequence of lower highs and lower lows since 6:00 PM October 22 has broken; a new reverse sequence is being established
  • At/below recently falling 20-bar EMA, which is at/above flattening 50-bar EMA
30-Minute (e-mini future)
  • Moving higher since 8:30 PM on November 1 from the low of 2563,25, also reached at 9:30 AM on October 27; broken above a down trend line from the highs during Asian session
  • At/above flattening 20-bar EMA, which is below a flattening 50-bar EMA

Previous Session

Most major U.S. indices closed higher on Wednesday November 1. NASDAQ Composite and Russell 2000 were down. Indices gapped up at the open but after that they most declined before a late session bounce, which did not go far.

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

 

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