Morning Notes – Thursday August 29, 2019

Sunil Sharma

5 years ago

Directional Bias For The Day:

S&P Futures are higher;
The odds are for an up day with elevated volatility – watch for break below 2906.25 for change of fortune
Key economic data due:
- Prelim GDP (2.0% vs. 2.0% est.; prev. 2.1%) at 8:30 AM
- Goods Trade Balance (-72.3B vs. -74.0B est.; prev. -74.2B) at 8:30 AM
- Prelim GDP Price Index (2.4% vs. 2.4%; prev. 2.4%) at 8:30 AM
- Prelim Wholesale Inventories (0.2% vs. 0.2% est.; prev. 0.0%) at 8:30 AM
- Unemployment Claims (215K vs. 215K est.; prev. 211K) at 8:30 AM
- Pending Home Sales (0.1% est.; prev. 2.8%) at 10:00 AM

Markets Around The World

- Markets in the East closed mixed – Hong Kong, Sydney and Singapore closed up; Shanghai, Tokyo, Mumbai and Seoul closed down
- European markets are higher
- Currencies:

Down

Dollar index
USD/JPY
USD/CHF
AUD/USD
NZD/USD

- EUR/USD
- GBP/USD
- USD/CAD
- USD/INR

Commodities:
Up Down
Crude Oil

NatGas

Gold

Silver

Copper

Platinum

Palladium
Sugar

Coffee

Cotton

Cocoa
Bonds
- 10-yrs yield is at 1.486%, up from August 28 close of 1.466%;
- 30-years is at 1.959%, up from 1.938%
- 2-years yield is at 1.512%, up from 1.504%
- The 10-Year-&-2-Year spread is at -0.038 up from -0.046
VIX
- Is at 18.18 down from August 28 close of 19.35 after a gap down open; below 5-day SMA 19.40
- Recent high was 21.64 on August 28; recent low was 15.51 on August 21

Key Levels:

Critical support levels for S&P 500 are 2901.70, 2890.77 and 2882.70
Critical resistance levels for S&P 500 are 2919.58, 2927.01 and 2932.35
Key levels for eMini futures: break above 2919.75, the high of 8:00 AM and break below 2906.50, the low of 4:30 AM

Pre-Open

On Wednesday, at 4:00 PM, S&P future closed at 2888.25 and the index closed at 2887.94 – a spread of about +0.25 points; futures closed at 2889.75 for the day; the fair value is -1.50
Pre-NYSE session open, futures are higher – at 9:00 AM, S&P 500 futures were up by +26.50; Dow by +252 and NASDAQ by +87.50

Directional Bias Before Open

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

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

Monthly	Under Pressure July formed a shooting star type doji at all time highs Stochastic is forming a Bearish Divergence RSI-9 is below a downtrend line from January 2018 high; forming a Bearish Divergence June 2019 was a large green Piercing or Bullish Engulfing candle that closed near the open of previous week; May was large Bearish Engulfing candle that closed near the lows Sequence of higher highs and higher lows since February 2016 is broken in December since then a new high has been made in May 2019
Weekly:	The week ending on August 23 was a large red Bearish Engulfing with small shadows Retracing from the upper bound of a broadening pattern Stochastic (9,1, 3): %K is below %D; falling near 30 RSI (9) is near 40 and falling Last week was down -41.57 or -1.4%; the 5-week ATR is 100.33 Last week’s pivot point=2873.72, R1=2912.47, R2=2997.83; S1=2808.36, S2=2769.61; No pivot levels were breached A down week; fourth in a row and fourth in last five weeks and sixth in last ten weeks Last swing low, 2728.81, was the low on June 3, 2018; previous all-time high of 2940.91 was breached during July 1 week Below 10-week EMA; above 39-week SMA and 89-week SMA Uptrend Under Pressure
*Daily*	A piercing candle with small lower shadow and almost no upper shadow %K is crossing above %D just below 50 RSI-9 turning up and is just below 50 Below 20-day EMA, 50-day EMA and 100-DAY SMA; above 200-day SMA; Uptrend Under Pressure
*2-Hour (e-mini future)*	Breaking above from a sideways of couple of days; nearing the upper limit of a horizontal channel between 2810.00 and 2940.00; RSI-21 is rising and is above 75 %K is above %D over 90 Above 20-bar EMA, which is above EMA10 of EMA50 Bias: Side-Up
*30-Minute (e-mini future)*	Broke above a horizontal channel between 2890.00 and 2855.00; 61.8% Fibonacci extension target is achieved near 2911.00 and the 100% extension target is near 2925.0 and 161.8% extension target is near 2946.00 RSI-21 is above 65 and declining; potential Bearish Divergence %K is below %D from above 90; potential Bearish Divergence Above 20-bar EMA, which is above EMA10 of EMA50 Bias: Side-Up
*15-Minute (e-mini future)*	Bollinger Band (20, 2.0) is moving up since 3:00 AM The Bollinger Band was narrow from 3:30 PM to 3:00 AM; expanded till 7:45 AM with price walking up the upper band; narrowing since Stochastic (9, 1, 3): %K is below %D near 50; Bearish Divergence Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Wednesday, August 28 in mostly lower volume that was also lower than 10-day average. Dow Jones Transportation Average traded in higher volume. Most indices made piercing candle. DTRAN made bullish engulfing pattern

From Briefing.com:

U.S. stocks finished higher on Wednesday in a broad-based advance. The S&P 500 increased 0.7%, quickly overcoming a negative start that was attributed to declining Treasury yields and finished near session highs.

The blue-chip Dow Jones Industrial Average increased 1.0%, the tech-sensitive Nasdaq Composite increased 0.4%, and the small-cap Russell 2000 increased 1.2%.
[…]
Yields came off session lows soon after stocks opened for trading, though, allowing risk sentiment to ease its way back into a flustered stock market. The 2-yr and 10-yr yields declined two basis points each to 1.51% and 1.47%, respectively. The U.S. Dollar Index increased 0.3% to 98.26.

Ten of the 11 S&P 500 sectors finished the day in positive territory. Energy (+1.4%), consumer discretionary (+1.1%), and industrials (+1.1%) set the pace, while the utilities sector (-0.3%) was the lone holdout. The energy sector entered today’s session down over 10% in August, but it found some reprieve amid higher oil prices ($55.76/bbl, +$0.86, +1.6%) following bullish inventory data.
[…]
Wednesday’s economic data was limited to the weekly MBA Mortgage Applications Index, which declined 6.2% following a 0.9% decline in the prior week.

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