Morning Notes – Monday July 16, 2018

/ July 16, 2018

Directional Bias For The Day:

  • S&P Futures are little changed to down; moving sideways with down bias since 10:30 AM on July 13
  • Odds are for a sideways day – watch for break above 2804.00 and below 2800.00 for clarity
  • Key economic data due:
    • Retail Sales (0.5% vs. 0.4% est.) at 8:30 AM
    • Core Retail Sales (0.4% vs. 0.4% est.) at 8:30 AM
    • Empire State Manufacturing Index (22.6 vs. 20.3 est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly down – Hong Kong Was up; Tokyo was closed
  • European markets are mostly lower – Germany and Spain are higher
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • USD/INR
    • Dollar index
    • USD/CHF
    • USD/CAD
  • Commodities:
    Up Down
    • Sugar
    • Coffee
    • Cotton
    • Cocoa
    • Crude Oil
    • NatGas
    • Gold
    • Silver
    • Copper
    • Platinum
    • Palladium
  • Bonds
    • 10-yrs yield is at 2.858%, up from July 13 close of 2.831%;
    • 30-years is at 2.961%, up from 2.933%
    • 2-years yield is at 2.603%, up from 2.586%
    • The 10-Year-&-2-Year spread is at 0.255, up from 0.245

Key Levels:

  • Critical support levels for S&P 500 are 2791.69, 2781.53 and 2773.49
  • Critical resistance levels for S&P 500 are 2804.53, 2808.92 and 2827.25
  • Key levels for eMini futures: break above 2804.50, the high of 7:00 AM and break below 2800.75, the low of 7:00 AM

Pre-Open

  • On Friday, at 4:00 PM, S&P future (September contract) closed at 2802.50 and the index closed at 2801.31 – a spread of about +1.25 points; futures closed at 2803.25 for the day; the fair value is -0.75
  • Pre-NYSE session open, futures price action is little changed to up – at 9:00 AM, S&P 500 futures were down by -0.25; Dow up by +19.00; and NASDAQ up by +3.00

Directional Bias Before Open

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

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 13 was a large green candle with almost no upper shadow and shaved bottom; the candle gapped up the open, which was not filled;
  • Last week’s pivot point=2791.45, R1=2814.39, R2=2827.47; S1=2778.7, S2=2755.43; R1 pivot level was breached;
  • A second up week in a row; third in last five weeks and seventh in last ten weeks
  • Breaking above an ascending triangle but still within an upsloping flag; a 100% extension target would be near 3070.00 level
  • 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 green candle small lower shadow and smaller upper shadow
  • %K crisscrossing %D above 75; above %D
  • 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 declining from 65
  • At/above 20-bar EMA, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (e-mini future)
  • Moving within a horizontal channel – high of 2809.00 and low of 2793.25 – since 12:30 PM on July 12
  • 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 mostly above 40 since 4:30 AM on July 11; moving around 40 after falling down from near 65
  • Below 50-bar EMA, which is below 20-bar EMA
  • Bias: Up-Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving sideways to down since 7:00 PM on July 15
  • The band narrowed during early Asian session; expanding a bit since 5:00 AM with price moving along the lower band
  • RSI is declining since 3:45 AM from near 65
  • The Stochastic (9, 1, 3): %K crossed above %D from near 30 at 7:30 AM
  • Bias: Up-Side

Previous Session

Most major U.S. indices closed higher on Friday July 13. Russell 2000 was down. NASDAQ Composite made all time intraday high and closed at all time high too. The volume was mixed. Dow Jones Industrial Average and NASDAQ Composite traded in higher volume and others in lower volume.

For the week, most major U.S. indices were higher. Russell 2000 was the lone laggard. The indices traded in higher volume during the week. Three S&P 500 sectors – Utility, Real Estate and Telecom – were lower for the week. Dollar was higher for the week along with Japanese Yen and Swiss Franc. Most commodities were down. Cotton and cocoa were up. 30-Year Treasury yields declined, 10-Year were unchanged and 2-Year yields were higher. The spread between 10-2 Year yields declined to 0.245 and 30-10 Year yields to 0.102.

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

 

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