Morning Notes – Wednesday February 13, 2019

/ February 13, 2019

Directional Bias For The Day:

  • S&P Futures are higher; moving up since 5:0 AM;
  • Odds are for an up day – watch for break below 2741.50 for change of fortune
  • Key economic data due:
    • CPI (0.0% vs. 0.1% est. and -0.1% prev.) at 8:30 AM
    • Core CPI (0.2% vs. 0.2% est. and 0.2% prev.) at 8:30 AM

Sentiment & Catalyst

  • Risk-on sentiment due to potential avoidance of government shutdown and trade deal

Markets Around The World

  • Markets in the East closed mostly higher – Sydney and Mumbai were down
  • European markets are higher
  • Currencies:
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • USD/INR
    • EUR/USD
    • GBP/USD
  • Commodities:
    Up Down
    • Crude Oil
    • Copper (Unch.)
    • Platinum
    • Palladium
    • Cotton
    • Cocoa
    • NatGas
    • Gold
    • Silver
    • Sugar
    • Coffee
  • Bonds
    • 10-yrs yield is at 2.708%, up from February 12 close of 2.684%;
    • 30-years is at 3.034%, up from 3.022%
    • 2-years yield is at 2.533%, up from 2.508%
    • The 10-Year-&-2-Year spread is at 0.175, down from 0.176

Key Levels:

  • Critical support levels for S&P 500 are 2742.03, 2739.51 and 2730.49
  • Critical resistance levels for S&P 500 are 2762.24, 2785.93 and 2792.63
  • Key levels for eMini futures: break above 2757.00, the high of 1:30 AM and break below 2746.75, the low of 5:30 AM

Pre-Open

  • On Tuesday, at 4:00 PM, S&P future (January contract) closed at 2744.00 and the index closed at 2744.73 – a spread of about -0.75 points; futures closed at 2744.75 for the day; the fair value is -0.75
  • Pre-NYSE session open, futures price action is to the upside – at 9:00 AM, S&P 500 futures were up by +8.50; Dow by +100; and NASDAQ by +32.00

Directional Bias Before Open

  • Weekly: Downtrend reversing
  • Daily: Up
  • 120-Min: Up
  • 30-Min: Up
  • 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 February 8 was a doji candle following the bullish engulfing candle of previous week; staying above the downtrend line from October 2018 high
    • Stochastics (9,1, 3) and RSI (14) moving up – %K is above %D and above 90; RSI is moving up and is just above 50
    • The index is at the 61.8% retracement of the decline from the high in early October 2018
    • The index reached below the 50% Fibonacci retracement level – at 2374.98 – from the rally from February 2016 low and reached a low of 2346.58; the 61.8% Fibonacci retracement is near 2251.86
    • During the week of October 22, Stochastics reached the lowest since the week of October 31, 2016; last week RSI reached the lowest since the week on August 15, 2011;
  • Last week was up +1.35 or +0.0% and ATR is 57.15
  • Last week’s pivot point=2709.56, R1=2737.30, R2=2766.71; S1=2680.15, S2=2652.41; No pivot levels were breached;
  • An up week; second in a row and fourth in last five weeks and sixth in last ten weeks
  • The break above an ascending triangle in May 2018 is nullified as the price has fallen below its low
  • The break above a down sloping flag on April 24 2017 is also nullified; the 161.8% extension target near 2835.46 was achieved; 100% extension target of a longer flag-pole near 2913.13 is achieved
  • Last swing low, 2532.69, was the low on February 5, 2018 and breached in December 2018
  • Below 10-week EMA and 39-week SMA; below 89-week SMA (first since June 27, 2016)
  • Downtrend Reversing
Daily
  • A large green candle that gapped up at the open; almost no lower shadow and small upper shadow
    • %K crossed above %D; is above 90; Bullish Spike;
    • RSI-14 rising; above 65;
    • RSI-9 is rising; above 70; SMA8 of RSI9 rising and is near 70
    • Sequence of lower highs and lower lows since October 3, 2018; need to rise above 2800.18 to break it
  • Above 20-day EMA, 50-day EMA; above 100-day SMA; at/below 200-day SMA
  • Uptrend
2-Hour (e-mini future)
  • Moving up since 10:00 AM on Friday;
    • Double Bottom/Horizontal Channel breakout at 2:00 PM on Monday; 261.8% extension target near 2758.00 is achieved
    • The Flag-Pennant, breakout January 30, 38.2% extension target near 2758.00 is achieved, the 61.8% extension target is near 2815.00 and the 100% extension target is near 2906.00
  • RSI-9 declined from 88.36 to below 70; bearish Divergence at midnight; near 75; bullish Failure Swing at 4:00 AM
  • Above 20-bar EMA, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (e-mini future)
  • Moving up since 2:30 PM on Monday; continuing the larger move up since Friday afternoon
  • RSI-9 declined from 78.72 to near 50; made a bearish Divergence at 1:00 AM; bullish Failure Swing a 1:00 AM
  • Above 20-bar EMA, which is above  EMA10 of EMA50
  • Bias: Up
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is moving sideways since 11:00 PM; Expansion from 7:00 PM to 11:00 PM
  • The Bollinger Band Squeeze from 11:45 PM to 3:15 AM; small Expansion till 7:00 AM; price walked down the lower band from 2:45 AM to 5:30 AM
  • Stochastic (9, 1, 3): %K crossed above %D at 8:15 AM near 60; Bullish Spike
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Tuesday February 12 in mostly higher volume. Dow Jones Transportation Average  traded in lower volume. Major indices are breaking above recent congestion / resistance zone. DJT is nearing the downtrend line from October high.

From Briefing.com:

The S&P 500 gained 1.3% on Tuesday, as optimism that U.S. lawmakers reached a tentative agreement to prevent another government shutdown helped fuel broad-based buying interest. Investors also remained hopeful for progress on the ongoing U.S-China trade talks.

The Dow Jones Industrial Average gained 1.5%, the Nasdaq Composite gained 1.5%, and the Russell 2000 gained 1.3%.

[…]

Tuesday’s gains helped the S&P 500 close above its 200-day moving average (2743) for the first time since Dec. 3.

10 of the 11 S&P 500 sectors finished with gains with materials (+2.3%), consumer discretionary (+1.7%), industrials (+1.6%), and financials (+1.6%) leading the advance. Conversely, the real estate (-0.7%) sector was the lone group to finish with a loss.

[…]

U.S. Treasuries ended the day on a lower note, pushing yields higher across the curve. The 2-yr yield and the 10-yr yield increased two basis points each to 2.50% and 2.68%, respectively. The U.S. Dollar Index pulled back 0.4% to 96.72, recording its first loss of the month. WTI crude rose 1.4% to $53.12/bbl.

[…]

• The NFIB Small Business Optimism Index for January decreased to 101.2 from the prior reading of 104.4 in December.
• The December Job Openings and Labor Turnover Survey showed that job openings increased to 7.335 million from a revised 7.166 million (from 6.888 million) in November.

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

 

Print Friendly, PDF & Email

Related posts