Morning Notes – Thursday July 19, 2018

/ July 19, 2018

Directional Bias For The Day:

  • S&P Futures are down; drifting down since 10:30 PM on July 18
  • Odds are for a down day – watch for break above 2812.75 for change of fortune
  • Key economic data due:
    • Philly Fed Manufacturing Index (25.7 vs. 21.6 est.) at 8:30 AM
    • Unemployment Claims (207K vs. 220K est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly down – Sydney was up
  • European markets are mostly down – U.K. and Switzerland are up;
  • Currencies:
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • USD/INR
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
  • Commodities:
    Up Down
    • NatGas
    • Cocoa
    • Crude Oil
    • Gold
    • Silver
    • Copper
    • Platinum
    • Palladium
    • Sugar
    • Coffee
    • Cotton
  • Bonds
    • 10-yrs yield is at 2.885%, up from July 18 close of 2.875%;
    • 30-years is at 3.001%, up from 2.989%
    • 2-years yield is at 2.628%, up from 2.607%
    • The 10-Year-&-2-Year spread is at 0.257, down from 0.268

Key Levels:

  • Critical support levels for S&P 500 are 2811.54, 2808.24 and 2789.24
  • Critical resistance levels for S&P 500 are 2816.74, 2822.42 and 2835.96
  • Key levels for eMini futures: break above 2810.00, the high of 7:00 AM and break below 2806.25, the low of 8:00 AM

Pre-Open

  • On Wednesday, at 4:00 PM, S&P future (September contract) closed at 2816.75 and the index closed at 2815.62 – a spread of about +1.25 points; futures closed at 2816.00 for the day; the fair value is +0.75
  • Pre-NYSE session open, futures price action is to the downside  – at 8:15 AM, S&P 500 futures were down by -9.50; Dow by -103.00; and NASDAQ by -30.25

Directional Bias Before Open

  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend resumed
  • 120-Min: Up
  • 30-Min: Side-Down
  • 15-Min: Side-Down
  • 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 small green candle with almost no upper shadow and small lower shadow
  • %K is above %D above 90;
  • Above 20-day EMA, 50-day EMA, 100-day SMA and 200-day SMA
  • Uptrend resumed
2-Hour (e-mini future)
  • Drifting down since the high of 2818.25 at 2:00 PM;
  • Bounced up from the EMA50 at 10:00 AM on July 17; broke above a resistance level; moving sideways since 12:00 PM on July 17
  • RSI-9 declining from 75 at 6:00 PM on July 17; just below 40
  • Below 20-bar EMA; above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (e-mini future)
  • Moving sideways-to-down since 12:30 PM on July 17; broke above down-sloping flag at 10:00 AM on July 17; 61.8% Fibonacci Extension near 2816.50 is achieved; the 100% Fibonacci Extension target is near 2833.00
  • A double top pattern – high of 2818.25 and low 2815.75; all Fibonacci extension targets have been achieved
  • 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 is drifting down from a high of 76.4 at 12:00 PM on July 17; near 30
  • Below 20-bar EMA, which is below 50-bar EMA
  • Bias: Side-Down
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving sideways to down 6:30 PM on July 17
  • The band narrowed, relatively, from 4:00 PM to 11:15 PM on July 18; expanding since with price moving along the lower band
  • RSI is trending down since 12:15 PM on July 17 from a high of 82.26; below 40
  • The Stochastic (9, 1, 3): %K crisscrossing %D near 20
  • Bias: Side-Down

Previous Session

Most major U.S. indices closed higher on Wednesday July 18. NASDAQ Composite was down. Day’s price-range was small except for Dow Jones Transportation Average. The volume was mixed. Dow Jones Industrial Average and Dow Jones Transportation Average traded in higher volume and others in lower volume.

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

 

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