Morning Notes – Tuesday February 21, 2017

/ February 21, 2017

Directional Bias For The Day:

  • The futures are higher
  • Drifting higher since 3:00 AM
  • Odds are for an up day; watch for the break above 2349.00 for change of fortunes

Markets Around The World

  • Markets in the East were mixed – Hong Kong and Sydney were down; Shanghai, Tokyo, Mumbai and Seoul closed higher
  • European markets are higher
  • Dollar index and GBP/USD are higher; USD/JPY and EUR/USD are down
  • Commodities are mixed – crude oil and copper are up; NatGas, gold and silver are lower
  • 10-yrs yield closed at 2.425% on February 17 down from February 16 close of 2.450%; 30-years closed at 3.031%, down from February 16 close of 3.051%

Key Levels:

  • Critical support levels for S&P 500 are 2345.24, 2339.58 and 2333.47
  • Critical resistance levels for S&P 500 are 2355.02, 2358.88 and 2366.60
  • Key levels for eMini futures: break above 2356.75, high of 2:00 AM on February 20 and break below 2349.00, the low of 3:00 AM

Pre-Open

  • Pre-NYSE session open, futures price action is to the upside – at 7:00 AM, S&P 500 futures were up by +5.50, Dow  by +64.00 and NASDAQ by +13.25
  • On Friday, at 4:00 PM, S&P future (March contract) closed at 2348.25 and the index closed at 2351.16 – a spread of about 3.00 points; futures closed at 2348.00 for the day; the fair value is +0.25

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

Monthly
  • Confirmed Uptrend
  • Uptrend resumption since Feb 08, 2016 after a pull back of -15.2%
Weekly:
  • Candlestick for the last week, Monday February 13, was a green candle, that gapped up from previous week
  • Up for four consecutive weeks
  • Broke above a down-sloping flag on November 14, 2016; first target of 2285.92 is met; next target is near 2363.14
  • Last swing low, 2083.79, was the low on November 4, 2016
  • Above 39-week SMA and 89-week SMA
Daily
  • A bullish engulfing over Thursday’s doji with smaller upper shadow
  • Made a double bottom at 11:00 AM on 30-minute timeframe
  • Intraday range less than 1.00% since December 29
  • Drifting higher within an up-sloping channel since December 27
  • Above 100-day, 200-day, 50-day, and 20-day SMA/EMA
  • Sequence of higher highs and higher lows
  • Last swing low 2263.62
2-Hour (e-mini future)
  • Price moving sideways since 10:00 PM on February 19
  • Chart pattern similar to that of past few days – price makes a high during Asian session then drift lower before U.S. session open but not by much
  • Confirmed uptrend
  • At rising 20-bar EMA; above rising 50-bar EMA
30-Minute (e-mini future)
  • Broken above a descending triangle; height = 7.25; break-point = 2353.00; target =2360.25
  • Above rising 20-bar and 50-bar EMAs

Previous Session

U.S. indices closed higher on Friday February 17. S&P 500 and Dow Jones Industrial Average closed at a high but did not make intraday high. NASDAQ Composite made both highs. Russell 2000 and Dow Transportation Average made neither highs.

The day stared with weakness and most indices were in red. The turnaround was near 11:00 AM with either intraday double bottom or near double bottom.

NASDAQ Composite made a bullish engulfing over a small doji candle of Thursday. There was not much material change in the chart patterns of the indices. VIX, S&P Volatility index, is below 12.00 since January 20. It gained +5.9% for the week.

S&P 500 was up for the fourth week in succession but S&P 500 Futures were up for five. NASDAQ and Russell 2000, too, were up for fourth week whereas DJIA and DJT were up for second week in a row.

 

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