Morning Notes – Monday March 4, 2019

/ March 4, 2019

Directional Bias For The Day:

  • S&P 500 3Mini Futures (2-Hour) 4-Mar-19, 7:30 AM S&P Futures are higher; moving up since 5:00 AM after declining from a high of 2819.75 at 6:00 PM
  • Odds are for an up day – watch for break below 2809.50 for change of fortune
  • No key economic data due:

Markets Around The World

  • Markets in the East closed mostly higher – Seoul was down; Mumbai was closed
  • European markets are mostly higher – Spain is down
  • Currencies:
    Up Down
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • USD/INR
    • EUR/USD
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Sugar
    • Cotton
    • Gold
    • Silver
    • Copper
    • Platinum
    • Palladium
    • Coffee
    • Cocoa
  • Bonds
    • 10-yrs yield is at 2.738%, down from March 1 close of 2.755%;
    • 30-years is at 3.105%, down from 3.124%
    • 2-years yield is at 2.549%, down from 2.520%
    • The 10-Year-&-2-Year spread is at 0.189, down from 0.194

Key Levels:

  • Critical support levels for S&P 500 are 2808.02, 2799.79 and 2795.76
  • Critical resistance levels for S&P 500 are 2816.94, 2829.17 and 2843.89
  • Key levels for eMini futures: break above 2815.75, the high of 4:00 AM and break below 2809.50, the low of 5:00 AM

Pre-Open

  • On Friday, at 4:00 PM, S&P future (January contract) closed at 2804.50 and the index closed at 2803.69 – a spread of about +0.75 points; futures closed at 2805.00 for the day; the fair value is -0.50
  • Pre-NYSE session open, futures price action is to the upside – at 8:30 AM, S&P 500 futures were up by +9.75; Dow by +94; and NASDAQ by +40.00

Directional Bias Before Open

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

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

Monthly
  • Under Pressure
  • October 2018 closed sharply lower; broke below previous four months’ lows; only third down month since October 2016; November was a harami spinning top near the lower end of October
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2% – continues; higher highs and higher lows
Weekly:
  • The week ending on March 1 was a long legged doji, with very small upper shadow, at the top
    • Stochastics (9,1, 3) and RSI (14) moving up – %K is crossing below %D above 95; RSI is moving up and is just above 60 and is breaking above a downtrend line from January 2018 high
    • The index is at 78.6% Fibonacci retracement of the decline from the high in early October 2018
  • Last week was up +11.02 or +0.4% and ATR is 38.36
  • Last week’s pivot point=2797.44, R1=2819.74, R2=2835.80; S1=2781.38, S2=2759.08; R1/R2 pivot levels were breached;
  • An up week; fifth in a row and ninth in last ten weeks
  • Last swing low, 2532.69, was the low on February 5, 2018 and breached in December 2018
  • Above 10-week EMA and 39-week SMA; above 89-week SMA
  • Uptrend
Daily
  • A small green doji like near a resistance level; small upper and lower shadows
    • %K has turned above %D from 50; Stochastic (70, 1, 3) Pop since February 11
    • RSI-9 is above 70; mostly moving around 70 since February 1
    • Sequence of lower highs and lower lows since October 3, 2018; need to rise above 2815.15 to break it; very near the resistance
  • Above 20-day EMA, 50-day EMA; above 100-day SMA; at/above 200-day SMA
  • Uptrend
2-Hour (e-mini future)
  • Drifting down after the gap-up open for the week and reaching a high of 2819.75 and closing the gap
    • Broke above a symmetrical triangle on February 28; the 61.8% extension target of the symmetrical triangle is near 2824.00 and the 100% extension target is near 2842.00
    • The Flag-Pennant, breakout January 30, the 61.8% extension target near 2815.00 is achieved and the 100% extension target is near 2906.00
  • RSI-9 declining since 6:00 PM on Sunday from above 70; making a bearish divergence
  • Above 20-bar EMA, which is above EMA10 of EMA50
  • Bias: Side-Up
30-Minute (e-mini future)
  • Drifting down since 6:00 PM on Sunday; finding support above the low of gap-up open;
  • RSI-9 is declining since 6:00 PM on Sunday from near 70;
  • At/above 20-bar EMA, which is above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving sideways to down since 10:45 PM on Sunday
  • The Bollinger Band narrowed from 10:45 to 2:00 AM; expanding since ; price first walk down the band till 6:00 AM; now crossing up to the upper band
  • Stochastic (9, 1, 3): %K is crisscrossing %D above 70
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mostly higher on Friday March 1 in mostly higher volume. Dow Jones Transportation Average closed down in lower volume. Dow Jones Industrial Average also traded in lower volume. Most indices made a small doji like candle. Russell 200 and Wilshire 5000 Total Market Index made relatively large green candle.

For the week, U.S. indices closed mixed in higher volume. S&P 500, NASDAQ Composite, NYSE Composite and Wilshire 5000 Total Market Index closed up. DJIA, DJT and Russell 2000 closed down for the week.

From Briefing.com:

Week in Review: Financials, Information Technology Lead Broader Market Higher

The S&P 500 increased 0.4% this week, extending its yearly gain to 11.8%, as shares of financial and technology companies outperformed. There was a lot of news for the market to digest, which included economic data, U.S-China trade updates, and geopolitics.

The Nasdaq Composite rose 0.9%. The Dow Jones Industrial Average and the Russell 2000, meanwhile, finished flat.

The S&P 500 financials (+0.8%), information technology (+1.0%), and energy (+1.1%) sectors outperformed the broader market. Conversely, the materials (-1.6%), real estate (-1.2%), and consumer staples (-0.4%) sectors underperformed.

[…]
  • S&P 500 Sectors
Sector Daily Trend (Visual) Relative Strength (Last Month – February) Relative Strength (March) %K vs. %D (March)
Consumer Discretionary Down SPY (Cross-Under) SPY Above
Consumer Staples Down SPY SPY Above
Energy Down XLE XLE Above
Materials Down SPY SPY Above
Industrials Down XLI XLI Above
Finance Down SPY (Cross-Under) SPY Above
Technology Down XLK (Cross-Over) XLK Above
Utility Under Pressure SPY SPY Above
Heath Care Down SPY SPY Above
Real Estate Down SPY (Cross-Under) SPY Below (Cross-Under)
Telecom Down XLT XTL Above

 

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