Morning Notes – Wednesday February 14, 2018

• Confirmed Uptrend
• December 2017 closed higher; index has been higher for the nine straight months; it has only one down month, March 2017, since October 2016
• Uptrend resumption since Feb 08, 2016 after a pull back of -15.2%

• The week ending on February 9 was a large red bodies candle with -5.2% decline following -3.9% decline with a bearish engulfing candle
• Last week’s pivot point=2638.54, R1=2744.40, R2=2869.24; S1=2513.70, S2=2407.84; S1/S2/S3 were breached;
• A down week; second in last five weeks and third in last ten weeks
• Broke above a down sloping flag on April 24 2017;
  • flag-low was 2322.25 during 27-Mar-17 week; shorter flag-pole length is 317.19 and longer flag-pole length is 590.88;
  • 100% extension target of shorter flag-pole near 2639.41 is achieved; and the 161.8% extension target is near 2835.46
  • 61.8% extension target of longer flag-pole near 2687.41 is achieved; the 100% extension target is near 2913.13
• Broke above a down-sloping flag on November 14, 2016;
  • the flag low was 2083.79 during 31-Oct-16 week; the shorter flag-pole length is 202.13 and the longer flag-pole length is 383.71;
  • 261.8% extension target of shorter flag-pole near 2612.97 is achieved
  • the 161.8% extension target of longer flag-pole near 2704.63 is achieved; the 261.8% extension target is near 3088.34
• Last swing low, 2322.25, was the low on March 27, 2017
• Below 10-week EMA; at 39-week SMA and above 89-week SMA
• Uptrend under pressure

Daily

• Another green body with small upper and lower shadows and under previous day’s high; last three days’ green real bodies are, still, within the large red body of February 8
• The 38.2% Fibonacci retracement from the lows of February 2016 is near 2465.50; the 38.2% Fibonacci retracement from June 2016 lows is near 2534.86 and the index low on Friday 2532.69
• Last big pattern, a down-sloping flag in June 2017, was broken to the upside on July 13, 2017; in August the index declined and tested the broken upper limit of the flag; since then the index has made three very small flags; it broke to the upside of the last flag on January 2
• Bounced off 200-day SMA on February 9
• Below 50-day EMA and 100-day SMA but above 200-day SMA

• Bounced off the lows of 2530.25 at 12:00 PM on February 9, testing the low of 2529.00 on February 5; trying to rise above the resistance of EMA10 of EMA50 at 2726.75; CPI news at 8:30 AM brought it to the EMA50 again
• RSI-9 rising from the lows of 19.35 at 2:00 PM on February 8; above 65 but below 75 then sharp decline to 40
• Sequence of higher highs and higher lows since August 29, 2017 is broken
• At/above 20-bar EMA and above EMA10 of EMA50
• Bias: Down-Side

• Potential double bottom or a horizontal channel emerging – two lows of 2529.00 at 11:30 PM on February 5 and 2530.25 at 1:30 PM on February 9 with an intermediate high of 2726.75 at 11:00 AM on February 7; nearing the middle of the channel
• RSI is mostly between 65 and 40 3:00 PM on February 9
• At 20-bar EMA which is at 50-bar EMA
• Bias: Side

• Bollinger Band (20, 2.0) is moving sideways, with slight up bias, since 9:15 PM on February 11
• The band contracted from 7:15 PM on February 13; sudden expansion following CPI news; price hugging the lower band
• RSI mostly rose from 3:15 AM on February 13 to 2:30 AM; dropped from 74.45 at 2:30 AM to below 25 by 8:30 AM
• The Stochastic (9, 1, 3): %K sharply turned down at 8:15 AM
• Bias: Side-Down

1. Consumer Discretionary
2. Consumer Staples
3. Industrials
4. Finance
5. Technology
6. Utility
7. Heath Care
8. Real Estate
9. Telecom

1. Energy
2. Materials