Morning Notes – Thursday July 12, 2018

/ July 12, 2018

Directional Bias For The Day:

  • S&P Futures are higher; moving up in steps since 9:00 PM on July 10
  • Odds are for an up to sideways day – watch for break above 2791.00 and below 2788.00 for clarity
  • Key economic data due:
    • CPI (0.1% vs. 0.2% est.) at 8:30 AM
    • Cor CPI (0.2% vs. 0.2% est.) at 8:30 AM
    • Unemployment Claims (214K vs. 226K est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed up
  • European markets are higher
  • Currencies:
    Up Down
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • EUR/USD
    • USD/CAD
    • USD/INR
  • Commodities:
    Up Down
    • Crude Oil
    • Gold
    • Silver
    • Copper
    • Platinum
    • Sugar
    • Coffee
    • Cotton
    • NatGas
    • Palladium
    • Cocoa
  • Bonds
    • 10-yrs yield closed at 2.862%, up from July 11 close of 2.842%;
    • 30-years is at 2.959%, up from 2.945%
    • 2-years yield is at 2.584%, up from 2.562%
    • The 10-Year-&-2-Year spread is at 0.284, up from 0.280

Key Levels:

  • Critical support levels for S&P 500 are 2770.77, 2768.51 and 2755.16
  • Critical resistance levels for S&P 500 are 2785.91, 2795.02 and 2801.90
  • Key levels for eMini futures: break above 2791.00, the high of 6:30 AM and break below 2788.00, the low of 8:00 AM

Pre-Open

  • On Wednesday, at 4:00 PM, S&P future (September contract) closed at 2776.25 and the index closed at 2774.02 – a spread of about +2.25 points; futures closed at 2774.00 for the day; the fair value is +2.25
  • Pre-NYSE session open, futures price action is to the upside – at 8:15 AM, S&P 500 futures were up by +14.50; Dow by +188.00; and NASDAQ by +38.75

Directional Bias Before Open

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

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 July 6 was a bullish engulfing candle with small upper and lower shadows;
  • Last week’s pivot point=2741.06, R1=2783.17, R2=2806.52; S1=2717.71, S2=2675.60; R1 pivot level was breached;
  • An up week; third in last five weeks and sixth 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 spinning top red candle that gapped down at the open and was not able to close the gap; small upper shadow and smaller lower shadow
  • %K crossed below %D from above 90
  • Above 20-day EMA, 50-day EMA, 100-day SMA and 200-day SMA
  • Uptrend resumed
2-Hour (e-mini future)
  • Moving up since 8:00 AM on June 28; higher highs and higher lows; a retracement from the high of 2797.75 on July 10 stopped at 2765.75 at 8:00 PM on July 10
  • RSI-9 rising from a low of 34.76 at 8:00 PM on July 10; above 65
  • Above 20-bar EMA, which is at/above EMA10 of EMA50
  • Bias: Up
30-Minute (e-mini future)
  • Mostly moving sideways since 1:30 PM on July 9
  • Broken above a horizontal channel – between 2747.50 and 2698.50 – the 100% extension target near 2796.50 is achieved and the 161.8% extension target is near 2826.75
  • RSI-9 trending up since 9:00 PM on July 10; above 65
  • Above 20-bar EMA, which is above 20-bar EMA
  • Bias: Up-Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving sideways, with an up bias, since 11: 30 PM on July 10
  • The band narrowed during early European session; expanding a bit since 5:00 AM
  • RSI is mostly within 40 and 65 since 6:45 PM on July 10
  • The Stochastic (9, 1, 3): %K crossed below %D from above 90 at 7:00 AM
  • Bias: Up-Side

Previous Session

Major U.S. indices closed down on Wednesday July 11. Indices gapped down at the open and attempts to close the gap by some did not succeed. Along with the gap-up opens of Monday and Tuesday, the three day candlestick pattern, for most indices, is in a danger of turning out to be an island reversal top. The volume was higher.

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

 

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