Morning Notes – Wednesday May 9, 2018

/ May 9, 2018

Directional Bias For The Day:

  • S&P Futures are higher; moved higher at 2:30 AM
  • Retreating from a resistance zone around 2683.00 level
  • Odds are for an up day with good likelihood of sideways move from pre-open level – watch for break above 2683.00 and below 2677.00 for clarity
  • Key economic data due:
    • PPI ( 0.1% vs. 0.2% est.) at 8:30 AM
    • Core PPI ( 0.2% vs. 0.2% est.) at 8:30 AM

Markets Around The World

  • Markets in the East were mixed – Shanghai, Tokyo and Seoul were down; Hong Kong, Sydney and Mumbai were up
  • European markets are mixed – Germany, France and Switzerland are down; U.K. Spain, Italy and STOXX 600 are up
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • USD/INR
    • Dollar index
    • USD/CHF
    • USD/CAD
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Gold
    • Silver
    • Copper
    • Platinum
    • Palladium
    • Cotton
    • Sugar
    • Coffee
    • Cocoa
  • Bonds
    • 10-yrs yield is at 3.006%, up from May 8 close of 2.969%;
    • 30-years is at 3.158%, up from 3.125%
    • 2-years yield is at 2.534%, up from 2.513%
    • The 10-Year-&-2-Year spread is at 0.472, up from 0.456

Key Levels:

  • Critical support levels for S&P 500 are 2655.20, 2637.14 and 2615.32
  • Critical resistance levels for S&P 500 are 2683.34, 2683.35 and 2698.79
  • Key levels for eMini futures: break above 2683.00, the high of 7:00 AM and break below 2677.00, the low of 4:00 AM

Pre-Open

  • On Tuesday, at 4:00 PM, S&P future (June contract) closed at 2670.25 and the index closed at 2672.63 – a spread of about -2.50 points; futures closed at 2670.00 for the day; the fair value is +0.50
  • Pre-NYSE session open, futures price action is to the upside – at 8:45 AM, S&P 500 futures were up by +8.75; Dow by +90.00; and NASDAQ by +14.50

Directional Bias Before Open

  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend Under Pressure
  • 120-Min: Side-Up
  • 30-Min: Side
  • 15-Min: Side-Up
  • 6-Min: Up-Side

The trend and patterns on various time frames for S&P 500 are:

Monthly
  • 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%
Weekly:
  • The week ending on May 4 was a small real body candlestick line with very small upper shadow and very long lower shadow
  • Last week’s pivot point=2646.99, R1=2699.35, R2=2735.29; S1=2611.05, S2=2558.69; S1/S2 pivot levels were breached;
  • A down week; third in last five weeks and sixth in last ten weeks
  • A symmetrical triangle pattern is emerging; price in the middle of the pattern
  • 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; Last swing high, 2872.87, was during the week of January 22, 2-018; the low since the last swing high is 2532.69 during the week if February 5, 2018
  • Below 10-week EMA; at 39-week SMA and above 89-week SMA
  • Uptrend under pressure
Daily
  • A small doji candle with small upper but larger lower shadow at the 50-day EMA; the index recovered most of its day’s loss in the final hour trading and closed near the high
  • In the middle of the symmetrical triangle after breaking below it for a day
  • Above 20-day EMA; at 50-day EMA and 100-day SMA; above 200-day SMA
  • Uptrend under pressure
2-Hour (e-mini future)
  • Rising since 10:00 AM on May 3 in steps; near a resistance zone around 2683.00 level
  • Declining since 2:00 PM on May 7; break above the downtrend line from April 18 high continues
  • RSI-9 bounced off 40 and is above 65
  • Above 20-bar EMA, which is above EMA10 of EMA50
  • Bias: Side-Up
30-Minute (e-mini future)
  • At the upper limit of a horizontal channel – between 2658.00 and 2681.50 – emerging since 1:30 PM on May 4
  • RSI trending up after making a bullish divergence at 6:30 AM on May 8 near 30; retreating from 76.12 to 60
  • Above 20-bar EMA, which is above 50-bar EMA
  • Bias: Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is mostly moving sideways from 4:000 PM on May 4;
  • The band is narrowed from 9:00 PM to 3:00 AM; expanded slightly after that; again narrowing since 8:00 AM
  • RSI mostly above 40 since 8:00 AM on May 8; fallen below 50 from a high of 77.4 at 4:45 AM
  • The Stochastic (9, 1, 3): %K declining in steps after making a bearish divergence above 90 at 5:45 AM
  • Bias: Side-Up

Previous Session

Major U.S. indices mostly advanced on Tuesday May 8 in mostly higher volume and increased volatility. The price action for the day was driven by the geo-politics and decision about Iran nuclear deal. Late in the day after 2:30 PM, the market rose from lows and closed near the highs. S&P 500 declined slightly and the volume on NASDAQ Composite declined. Mots indices made doji or near doji candlestick lines except Russell 200 and Dow Transportation Average.

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

Related posts