Market Remarks

Morning Notes – Tuesday November 19, 2019

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher, though pulling back little bit since 4:30 AM
  • The odds are for an up to sideways day; watch for break below 3115.25 for change of fortune
  • Key economic data due:
    • Building Permits ( 1.46M vs. 1.39M est.; prev. 139M) at 8:30 AM
    • Housing Starts (1.31M vs. 1.32M est.; prev. 127M) at 8:30 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3118.06, 3112.06 and 3104.60
  • Critical resistance levels for S&P 500 are 3126.78, 3131.53 and 3138.89
  • Key levels for eMini futures: break above 3132.00, the high of 4:30 AM and break below 3115.75, the low of 7:30 PM

Pre-Open

  • On Monday, at 4:00 PM, S&P future closed at 3121.00 and the index closed at 3122.03 – a spread of about -1.00 points; futures closed at 3121.75 for the day; the fair value is +0.75
  • Pre-NYSE session open, futures are higher – at 8:30 AM, S&P 500 futures were up by +6.75; Dow by +42 and NASDAQ by +32.25

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Hong Kong, Sydney and Mumbai closed up; Tokyo, Seoul and Singapore were down
  • European markets are higher
  • Currencies:
    Up Down
    • EUR/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • Dollar index
    • GBP/USD
    • USD/CAD
    • INR/USD
  • Commodities:
    Up Down
    • Silver
    • Copper
    • Platinum
    • Palladium
    • Coffee
    • Cocoa
    • Crude Oil
    • NatGas
    • Gold
    • Sugar
    • Cotton
  • Bonds
    • 10-yrs yield closed at 1.814%, down from November 15 close of 1.834%;
    • 30-years is at 2.291%, down from 2.311%
    • 2-years yield is at 1.606%, down from 1.614%
    • The 10-Year-&-2-Year spread is at 0.208 down from 0.220
  • VIX
    • Is at 12.31 down from November 18 close of 12.46; below 5-day SMA
    • Recent high was 13.95 on October 31; recent low was 11.92 on November 15

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 15 was a green candle with almost no upper and lower shadows
    • 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 +27.38 or +0.9%; the 5-week ATR is 41.49
  • Last week’s pivot point=3105.58, R1=3135.34, R2=3150.22; S1=3090.70, S2=3060.94; R1/R2 pivot levels were breached
  • An up week; fifth in last five weeks and seventh 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 doji candle with small lower and smaller upper shadows
    • %K is crisscrossing %D above 80
    • RSI-9 is above 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)
  • (Similar pattern as that on Monday morning) Moving up since 10:00 AM on November 14 after breaking above a sideway range; uptrend since October 9
    • RSI-21 is moving around 70
    • %K is crisscrossing %D
  • Above 20-bar EMA, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (e-mini future)
  • (Similar pattern as that on Monday morning) Moving up since 1:30 PM on November 14
    • RSI-21 moving above 50 since 2:00 PM on November 14
    • %K is below %D since 5:00 AM
    • Above 20-bar EMA, which is above EMA10 of EMA50
  • Bias: Up
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is mostly drifting up since 10:00 AM on Friday
  • The Bollinger Band is relatively narrow since 1:15 PM on Monday
  • Stochastic (9, 1, 3): %K is below %D since 8:15 AM
  • Bias: Up

Previous Session

Major U.S. indices closed mostly higher on Monday, November 18 in mostly lower volume. Russell 2000 and NYSE Composite closed down. Dow Jones Transportation Average traded in lower volume. The day’s price range was small. The indices declined in the beginning before turning around mid-day and then mostly traded higher.

From Briefing.com:

The S&P 500 (+0.1%), Dow Jones Industrial Average (+0.1%), and Nasdaq Composite (+0.1%) eked out incremental gains to close at record highs on Monday. The Russell 2000 (-0.3%) closed in negative territory.

[…]

The large-cap indices eased their way into positive territory thanks to the turnarounds in the S&P 500 consumer discretionary (+0.3%), information technology (+0.3%), and communication services (+0.3%) sectors. Consistent leaders included the consumer staples (+0.5%) and real estate (+0.5%) sectors, as the negative-sounding trade headline likely fostered some conservative-minded interest.
The trade-sensitive industrials (-0.3%) and materials (-0.2%) sectors were among today’s laggards, but their losses were small compared to the 1.3% drop in the energy sector, which was pressured by the decline in oil prices ($57.04, -0.71, -1.2%).

[…]

U.S. Treasuries extended last week’s advance, pushing yields slightly lower across the curve. The 2-yr yield declined two basis points to 1.59%, and the 10-yr yield declined three basis points to 1.81%. The U.S. Dollar Index declined 0.2% to 97.80.

Separately, the NAHB Housing Market Index for November declined to 70 from 71 in October. Investors will receive Housing Starts and Building Permits for October on Tuesday.

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