Morning Notes – Tuesday June 26, 2018

/ June 26, 2018

Directional Bias For The Day:

  • S&P Futures are little changed; moving mostly sideways since 3:45 PM on June 25 after a bounce from lows;
  • Bias is up but needs to clear some resistance levels near 2728.00 and 2735.00
  • Odds are for a sideways to up day – watch for break above 2728.50 and break below 2714.75 for more clarity
  • Key economic data due:
    • CB Consumer Confidence  (est. 127.6) at 10:00 AM

Markets Around The World

  • Markets in the East closed mostly down – Tokyo and Mumbai were up
  • European markets are mostly up – Switzerland is down
  • Currencies:
    Up Down
    • Dollar index
    • USD/CHF
    • USD/CAD
    • USD/INR
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Sugar
    • Coffee
    • Gold
    • Silver
    • Copper
    • Platinum
    • Palladium
    • Cotton
    • Cocoa
  • Bonds
    • 10-yrs yield is at 2.872%, down from June 25 close of 2.875%;
    • 30-years is at 3.019%, down from 3.024%
    • 2-years yield is at 2.541%, down from 2.549%
    • The 10-Year-&-2-Year spread is at 0.347, up from 0.337

Key Levels:

  • Critical support levels for S&P 500 are 2698.67, 2676.81 and 2755.20
  • Critical resistance levels for S&P 500 are 2722.21, 2742.94 and 2764.04
  • Key levels for eMini futures: break above 2728.50, the high of 3:00 AM and break below 2714.75, the low of 6:30 AM

Pre-Open

  • On Monday, at 4:00 PM, S&P future (September contract) closed at 2720.00 and the index closed at 2717.07 – a spread of about +3.25 points; futures closed at 2722.25 for the day; the fair value is -2.25
  • Pre-NYSE session open, futures price action is little changed to up – at 8:30 AM, S&P 500 futures were up by +0.75; Dow down by -9.00; and NASDAQ up by +14.50

Directional Bias Before Open

  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend under pressure
  • 120-Min: Down
  • 30-Min: Down-Side
  • 15-Min: Down-Side
  • 6-Min: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 June 22 was a red spinning top candle with almost equal sized upper and lower shadow
  • Last week’s pivot point=2757.69, R1=2772.18, R2=2789.49; S1=2740.38, S2=2725.89; S1/S2 pivot levels were breached;
  • A down week; first in last five weeks and fourth 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; 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
  • Above 10-week EMA; above 39-week SMA and above 89-week SMA
  • Uptrend resumed
Daily
  • A large red candle with no upper shadow and lower shadow equal to two third of the real body; the candle gapped down at the open
  • %K is below %D; trying to cross over
  • Below 20-day EMA and 50-day EMA; above 100-day SMA and 200-day SMA
  • Uptrend under pressure
2-Hour (e-mini future)
  • Trying to bounce off from 2700.50, near a support at 2699.75 at 2:00 PM on June 25; bounce stalling since midnight
  • Declining since 10:00 AM on June 13 in steps; sequence of lower highs and lower lows resumed; below a downtrend line
  • RSI-9 trending down since the high of 70.04 at 8:00 PM on June 20; bouncing off a low of 15.68 at 10:00 June 25; still below 40
  • %K crossed above %D at 12:00 PM on June 25 from below 10; made a bullish divergence at 2:00 PM
  • Below 20-bar EMA, which is below EMA10 of EMA50
  • Bias: Down
30-Minute (e-mini future)
  • Broke below a descending triangle at 9:30 Am on June 25; 100% extension target is near 2685.00; 61.8% extension target is achieved the resistance is at 2735.75
  • Moving sideways since 4:00 PM on June 25
  • RSI-9 above 40 since 3:30 PM but below 56
  • At/below 20-bar EMA, which is below 50-bar EMA
  • Bias: Down-Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving sideways since 4:15 PM on June 25
  • The band narrowed at 9:30 PM after an expansion during the day
  • RSI mostly above 40 since 3:15 PM on June 25; approaching 50 from below
  • The Stochastic (9, 1, 3): %K crossed above %D at 6:30 AM from below 30;
  •  Bias: Down-Side

Previous Session

Major U.S. indices closed sharply lower on Monday June 25. The volume was mixed. Volume was lower for Dow Jones Industrial Average and Dow Jones Transportation Average but higher for S&P 500, NASDAQ Composite and Russell 2000. Indices recovered a portion of their day’s loss after 2:30 PM.

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

 

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