Morning Notes – Thursday August 2, 2018

Directional Bias For The Day:

  • S&P Futures are lower
  • Odds are for a down day with high volatility – watch for break above 2798.75 for clarity
  • Key economic data due:
    • Unemployment Claims (218K vs. 220K est.) at 8:30 AM

Markets Around The World

  • Markets in the East closed lower
  • European markets are lower
  • Currencies:
    Up Down
    • Dollar index
    • USD/CHF
    • USD/CAD
    • USD/INR
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Platinum
    • Palladium
    • Sugar
    • Cocoa
    • Gold
    • Silver
    • Copper
    • Cotton
    • Coffee
  • Bonds
    • 10-yrs yield is at 2.997%, down from August 1 close of 3.003%;
    • 30-years is at 3.135%, up from 3.127%
    • 2-years yield is at 2.674%, down from 2.682%
    • The 10-Year-&-2-Year spread is at 0.323, up from 0.321

Key Levels:

  • Critical support levels for S&P 500 are 2805.85, 2798.11 and 2795.14
  • Critical resistance levels for S&P 500 are 2816.94, 2825.83 and 2833.26
  • Key levels for eMini futures: break above 2798.75, the high of 8:30 AM and break below 2792.50, the low of 8:00 AM

Pre-Open

  • On Wednesday, at 4:00 PM, S&P future (September contract) closed at 2813.50 and the index closed at 2813.36 – a spread of about +0.00 points; futures closed at 2810.75 for the day; the fair value is +2.75
  • Pre-NYSE session open, futures price action is to the downside – at 8:45 AM, S&P 500 futures were down by -12.50; Dow by -148.00; and NASDAQ by -48.25

Directional Bias Before Open

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

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 20 was a green candle that broke above a doji candle of previous week; the real body smaller than the upper shadow
  • Last week’s pivot point=2820.66, R1=2846.19, R2=2873.55; S1=2793.30, S2=2767.77; R1/R2/R3 pivot levels were breached;
  • A fourth up week in a row; fourth in last five weeks and eight in last ten weeks
  • Broke above an ascending triangle but retraced back to its upper limit; 100% extension target is 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 red spinning top with small upper and lower shadows
  • %K is below %D after making a bearish divergence
  • Above 20-day EMA, 50-day EMA, 100-day SMA and 200-day SMA
  • Uptrend
2-Hour (e-mini future)
  • Downtrend since July 25 2:00 PM high of 2849.50;
  • RSI-9 moving down since 12:00 PM on July 31 from a high of 70.92; just below 30
  • Below 20-bar EMA, which is below EMA10 of EMA50
  • Bias: Side-Down
30-Minute (e-mini future)
  • Broke below a horizontal channel 1t 11:30 PM on August 1; the 100% extension target near 2796.00 is achieved; the 161.8% extension target is near 2788.00
  • RSI-9 trending down from a high of 61.81 at 10:30 AM on August 1; rising since 6:30 from a low of 20.17
  • 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 down since 9:30 PM on August 1
  • The band expanding since 11:30 PM; price moved along the lower band till 6:45 AM; now at the mid-level;
  • RSI mostly between 40 and 20 from 11:15 PM to 8:15 AM; rising above 40 but still below 50
  • The Stochastic (9, 1, 3): %K crossing below %D from above 90 at 8:45 AM
  • Bias: Down

Previous Session

Most major U.S. indices closed lower on Wednesday August 1. NASDAQ Composite was up. The volume was lower.

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