Market Remarks

Morning Notes – Wednesday November 13, 2019

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are essentially moving sideways for the past few days
  • The odds are for a sideways day to down; watch for break above 3088.00 and below 3072.50 for clarity
  • Key economic data due:
    • CPI (0.4% vs. 0.3% est.; prev. 0.0%) at 8:30 AM
    • Core CPI (0.2% vs. 0.2% est.; prev. 0.1%) at 8:30 AM
    • Fed Chair Powell Testimony to Congress

Directional Bias Before Open:

  • Weekly: Uptrend
  • Daily: Confirmed Uptrend
  • 120-Min: Up-Side
  • 30-Min: Side
  • 15-Min: Side-Down
  • 6-Min: Up

Key Levels:

  • Critical support levels for S&P 500 are 3084.73, 3075.82 and 3065.89
  • Critical resistance levels for S&P 500 are 3092.82, 3098.94 and 3102.61
  • Key levels for eMini futures: break above 3088.00, the high of 3:00 AM and break below 3074.50, the low of 9:30 AM on November 11

Pre-Open

  • On Tuesday, at 4:00 PM, S&P future closed at 3091.25 and the index closed at 3091.84 – a spread of about -0.50 points; futures closed at 3092.00 for the day; the fair value is -0.75
  • Pre-NYSE session open, futures are lower – at 9:00 AM, S&P 500 futures were down by -8.75; Dow by -91 and NASDAQ by -26.50

Markets Around The World

  • Markets in the East closed lower
  • European markets are lower
  • Currencies:
    Up Down
    • Dollar index
    • EUR/USD
    • GBP/USD
    • NZD/USD
    • USD/CAD
    • INR/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
  • Commodities:
    Up Down
    • Gold
    • Silver
    • Palladium
    • Platinum
    • Coffee
    • Cocoa
    • Crude Oil
    • NatGas
    • Copper
    • Sugar
    • Cotton
  • Bonds
    • 10-yrs yield closed at 1.909%, down from November 11 close of 1.943%;
    • 30-years is at 2.384%, down from 2.427%
    • 2-years yield is at 1.580%, down from 1.671%
    • The 10-Year-&-2-Year spread is at 0.251down from 0.272
  • VIX
    • Is at 13.37 up from November 12 close of 12.68; above 5-day SMA
    • Recent high was 13.95 on October 31; recent low was 12.07 on November 8

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

Monthly
  • Uptrend resumed
  • September was a green candle with small upper shadow and lower shadow longer than the real body
    • Stochastic %K is above %D and above 90
    • RSI-9 is breaking above a downtrend line from January 2018 high;
    • Rising to the upper band from near the middle band of the 120-month regression channel
  • 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 November 8 was a green candle with almost small upper shadow and longer lower shadow
    • Breaking above the upper bound of a broadening pattern
    • Stochastic (9,1, 3): %K is above %D; above 90;
    • RSI (9) is above 70
  • Last week was up +26.17 or +0.9%; the 5-week ATR is 52.69
  • Last week’s pivot point=3085.58, R1=3105.27, R2=3117.46; S1=3073.39, S2=3053.70; R1/R2 pivot levels were breached
  • An up week; Fifth in last five weeks and eight in last ten weeks
  • Last swing low, 2728.81, was the low on June 3, 2018; last swing high was 3027.98, made during the week of July 22
  • Above 10-week EMA; above 39-week SMA and 89-week SMA
  • Uptrend
Daily
  • A small green candle with small lower shadow and longer upper shadow
    • %K is crisscrossing %D above 80
    • RSI-9 is below 8-day SMA
  • Broke above a symmetrical triangle, that resembles an ascending triangle, on October 25;
    • Upper bound 3027.98 and lower bound 2898.07; max height almost 130; break point is 3016.00; the 61.8% extension target near 3096.00 is achieved; the 100% extension target is near 3146.00;
  • Above 20-day EMA, 50-day EMA, 100-day SMA and 200-day SMA;
  • Uptrend
2-Hour (e-mini future)
  • Drifting mostly sideways to up since 8:00 AM on November 4 within a 30 point band; uptrend since October 9
    • RSI-21 is moving around 50
    • %K is above %D since 12:00 AM
  • At/below 20-bar EMA, which is at/above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (e-mini future)
  • Moving sideways since 2:30 AM on November 7 between 3097.00 and 3072.50
    • RSI-21 moving near 50
    • %K is above %D higher since 5:00 AM
    • At/below 20-bar EMA, which is below EMA10 of EMA50
  • Bias: Side
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is drifting lower since 3:15 PM on November 12
  • The Bollinger Band narrowed from 00:15 AM to 2:45 AM; expanding since; price walked down the lower band till 5:00 AM and then bounced up to the upper band by 8:30 AM
  • Stochastic (9, 1, 3): %K is crisscrossing %D above 80
  • Bias: Side-Down

Previous Session

Major U.S. indices closed mixed on Tuesday, November 12 in higher volume. Dow Jones Industrial Average closed unchanged, Dow Jones Transportation Average and NYSE Composite closed lower. The day’s price range was small. Indices opened up and the made days high in early trading and then mostly traded sideways to down. before closing near the open rnage.

From Briefing.com:

The S&P 500 clipped the 3100 level for the first time on Tuesday, but the record run lost some steam to leave the benchmark index up just 0.2% and below 3100 on a closing basis. The Nasdaq Composite (+0.3%) closed at a record high, while the Dow Jones Industrial Average (unch) and Russell 2000 (unch) finished unchanged.

[…]

It was still a generally positive day for the stock market, which has been resilient to any pullback effort this month. Relative strength was found in the S&P 500 health care (+0.6%) and materials (+0.4%) sectors, while relative weakness rested in the real estate (-0.8%) and energy (-0.6%) sectors.

[…]

The Treasury market reopened for trading after being closed for Veterans Day yesterday. An uptick in demand pushed the 2-yr yield down one basis point to 1.65% and the 10-yr yield down two basis points to 1.91%. The U.S. Dollar Index increased 0.2% to 98.34. WTI crude was unchanged at $56.85/bbl.

Tuesday’s economic data was limited to the Small Business Optimism Index for October, which improved to 102.4 from 101.8 in September. On Wednesday, investors will receive the Consumer Price Index for October, the Treasury Budget for October, and the weekly MBA Mortgage Applications Index.

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