Morning Notes – Thursday July 20, 2017

/ July 20, 2017

Directional Bias For The Day:

  • S&P Futures are little changed to higher
  • Drifting sideways since 7:00 PM on July 19
  • Breaking above 4:00 AM high of 2474.00
  • Odds are for an up day; watch for break below 2469.25 for a change of fortunes;
  • Key economic data due:
    • Unemployment claims (est. 245K) at 8:30 AM
    • Philly Fed Manufacturing Index (est. 23.4) at 8:30 AM
    • ECB Press Conference at 8:30 AM

Markets Around The World

  • Markets in the East closed mostly higher – Mumbai was down
  • European markets are mostly up – Spain is down
  • Dollar index and USD/JPY are higher; GBP/USD and EUR/USD are lower
  • Commodities are mixed – crude oil, NatGas and copper are higher; gold and silver are down
  • 10-yrs yield closed at 2.268% on July 19, up from July 18 close of 2.263%; 30-years closed at 2.845% down from 2.851%

Key Levels:

  • Critical support levels for S&P 500 are 2465.20, 2460.92 and 2450.34
  • Critical resistance levels for S&P 500 are 2477.16, 2480.48 and 2487.14
  • Key levels for eMini futures: break above 2474.00, the high of 3:30 AM and break below 2469.25, the low of 7:00 PM on July 19

Pre-Open

  • On Wednesday, at 4:00 PM, S&P future (September contract) closed at 2470.75 and the index closed at 2473.83 – a spread of about 3.00 points; futures closed at 2471.50 for the day; the fair value is -0.75
  • Pre-NYSE session open, futures price action is little changed to higher – at 8:00 AM, S&P 500 futures were up by +2.00; Dow by +2.00; and NASDAQ by +10.00

Directional Bias Before Open

  • Weekly: Up
  • Daily: Up
  • 120-Min: Up
  • 30-Min: Up

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, Friday July 14 was bullish engulfing pattern; breaking out to the upside
  • Last week’s pivot point 2445.20; R1=2477.61, R2=2495.95; S1=2426.86, S2=2394.45
  • An up week – second in a row and fourth in last five weeks; sixth in last ten weeks
  • Broke above a down sloping flag (2378.36) on April 24, which has bullish implications; first target is near 2520.00 and the second target is near 2640.00
  • Broke above a down-sloping flag on November 14, 2016; first target of 2285.92 is achieved; second target is near 2467.50
  • Last swing low, 2322.25, was the low on March 27, 2017
  • Above 39-week SMA, 89-week SMA and 10-week SMA
  • Confirmed uptrend, though pulling back
Daily
  • A green candle with no shadows that gapped up from previous candle
  • Breaking to the upside from down sloping flag on daily timeframe since June 5 with high point made on June 19; breaking above the flag pole
  • Bouncing off the upper limit of a horizontal channel that it broke above in May – high 2400.58 and low 2322.25 – 100% extension target near 2480.00
  • Above 20-day EMA, 50-day EMA, 100-day and 200-day
  • Uptrend resumed
2-Hour (e-mini future)
  • Moved higher at 2:00 AM after sideway move since NYSE close; sideways move since 2:00 AM
  • Sequence of higher highs and higher lows since 12:00 PM on June 29;
  • Above 20-bar EMA, which is above a rising 50-bar EMA
30-Minute (e-mini future)
  • Moving higher since 10:30 AM on July 18;
  • Sequence of higher highs and higher lows since 11:00 AM on July 11
  • Above rising 20-bar EMA, which is above 50-bar EMA

Previous Session

Major U.S. indices closed mostly higher on Wednesday. Dow Jones Transportation Average was the only one to decline. Most also made all time highs. Dow Jones Industrial Average was another major index that did not make all time high.

All S&P 500 sectors were up. The best performers were Energy (+1.5%), Materials (+1.05%) and Healthcare (+0.8%).

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