Market Remarks

Morning Notes – Friday December 20, 2019

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher; moving higher since 4:30 AM
  • The odds are for an up day – watch for break below 3209.00 for change of fortune
  • Key economic data due:
    • Final GDP ( 2.1% vs. 2.1% est.; prev. 2.1%) at 8:30 AM
    • Final GDP Price Index (1.8% vs. 1.8% est.; prev. 1.8%) at 8:30 AM
    • Core PCR Index ( 0.1% est.; prev. 0.1% ) at 10:00 AM
    • Personal Spending (0.4% est. ; prev. 0.3% ) at 10:00 AM
    • Personal Income ( 0.3% est.; prev. 0.0% ) at 10:00 AM
    • Revised UoM Consumer Sentiment ( 99.2 est. ; prev. 99.2) at 10:00 AM
    • Revised UoM Inflation Expectations ( prev. 2.4%) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3205.46, 3200.52 and 3192.32
  • Critical resistance levels for S&P 500 are 3209.79, 3214.22 and 3222.95
  • Key levels for eMini futures: break above 3217.00, the high of 9:00 AM and break below 3209.00, the low of 4:30 AM

Pre-Open

  • On Thursday, at 4:00 PM, S&P future (March 2020) closed at 3210.25 and the index closed at 3205.37 – a spread of about +5.00 points; futures closed at 3211.75 for the day; the fair value is -1.50
  • Pre-NYSE session open, futures are higher – at 8:45 AM, S&P 500 futures were up by +3.75; Dow by +47 and NASDAQ up by +20.75

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Tokyo and Sydney closed lower; Hong Kong, Mumbai, Seoul and Singapore closed higher
  • European markets are higher
  • Currencies:
    Up Down
    • Dollar index
    • GBP/USD
    • USD/CHF
    • AUD/USD
    • USD/CAD
    • INR/USD
    • EUR/USD
    • USD/JPY
    • NZD/USD
  • Commodities:
    Up Down
    • NatGas
    • Silver
    • Platinum
    • Palladium
    • Coffee
    • Crude Oil
    • Gold
    • Copper
    • Sugar
    • Cotton
    • Cocoa
  • Bonds
    • 10-yrs yield closed at 1.935%, up from December 18 close of 1.924%;
    • 30-years is at 2.364%, up from 2.351%
    • 2-years yield is at 1.623%, down from 1.631%
    • The 10-Year-&-2-Year spread is at 0.312 up from 0.293
  • VIX
    • Is at 12.17 down from December 19 close of 12.50; below 5-day SMA
    • Recent high was 16.90 on December 10; recent low was 11.42 on November 26

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

Monthly
  • Uptrend resumed
  • October was a relatively large green candle with almost not lower shadow and small upper shadow
    • 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
Weekly:
  • The week ending on December 13 was a green candle with large real body and small shadows
    • Continuing the break above the upper bound of a broadening pattern
    • Stochastic (9,1, 3): %K crossed above %D; above 90;
    • RSI (9) is above 70
  • Last week was up +22.89 or +0.7%; the 5-week ATR is 52.34
  • Last week’s pivot point=3159.29, R1=3192.29, R2=3215.78; S1=3135.70, S2=3102.60; R1 pivot level was breached
  • Third up week in a row; fourth in last five weeks and ninth in last ten weeks
  • All time highs; 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 green candle with almost no upper and lower shadows; all time highs
    • %K is above %D; just above 90
    • RSI-9 is above 70 and 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 100% extension target near 3146.00 is achieved; the 161.8% extension target is near 3226.00
  • Above 20-day EMA, 50-day EMA, 100-day SMA and 200-day SMA;
  • Uptrend
2-Hour (e-mini future)
  • Broke above a sideways at 10:00 AM on Thursday; trending higher since 10:00 AM on December 3 in steps
    • RSI-21 rising above 70
    • %K is above %D
  • Above 20-bar EMA, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (e-mini future)
  • Broke above a horizontal channel; 100% extension target near 3214.00 is achieved; 161.8% extension target is near 3220.00
    • RSI-21 is above 60
    • %K is crisscrossing %D higher since 1:30 AM
    • Above 20-bar EMA, at/above EMA10 of EMA50
  • Bias: Up
15-Minute (e-mini future)
  • Bollinger Band (20, 2.0) is drifting sideways to up since 9:30 PM on Thursday
  • The Bollinger Band was relatively narrow from 9:30 PM to 5:30 AM; expanding since with price mostly walking up the upper band
  • Stochastic (9, 1, 3): %K is crossing above %D above 80
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Thursday, December 19 in mixed volume. S&P 500 and NASDAQ Composite traded in higher volume. All but Dow Jones Transportation Average made all time highs.

From Briefing.com:

The S&P 500 closed above the 3200 level for the first time on Thursday in a modest 0.4% advance. The Nasdaq Composite (+0.7%) and Dow Jones Industrial Average (+0.5%) also extended their reach into record territory. The Russell increased 0.3%.

[…]

Today’s session, though, appeared to just be a continuation of the market’s bullish bias. Nine of the 11 S&P 500 sectors finished in positive territory, with the real estate sector (+1.1%) continuing to benefit from a bargain-hunting mindset. Conversely, the energy (-0.1%) and utilities (-0.1%) sectors finished lower.

[…]

U.S. Treasuries edged higher, pushing yields slightly lower across the curve. The 2-yr and 10-yr yields both declined two basis points each to 1.60% and 1.91%, respectively. The U.S. Dollar Index finished little changed at 97.39. WTI crude rose 0.6% (+0.37%) to $61.30/bbl.

[…]

• Existing home sales declined 1.7% m/m in November to a seasonally adjusted annual rate of 5.35 million units (Briefing.com consensus 5.45 million) from a downwardly revised 5.44 million (from 5.46 million) in October.
o The key takeaway from the report is that home sales continue to be held back by the same forces: a lack of available supply and rising prices.
• Initial claims for the week ending December 7 rose by 49,000 to 252,000 (Briefing.com consensus 212,000). That is the highest level of initial claims since September 30, 2017. Continuing claims for the week ending November 30 decreased by 31,000 to 1.667 million.
o The key takeaway from the report is that the latest figure is outside the range of what has become typical reporting for this series, so it may be discounted as aberrant; however, the slowly rising uptick in the four-week moving average for initial claims implies that we may have seen the bottom for this cycle.
• The Conference Board’s Leading Economic Index (LEI) was unchanged in November (Briefing.com consensus +0.1%) following three straight monthly declines. October was revised to -0.2% from -0.1%.
o The key takeaway from the report is the understanding that the LEI went negative (-0.2%) for the six-month period ending November versus growth of 0.3% over the previous six months.
• The Philadelphia Fed Index for December came in at 0.3 (Briefing.com consensus 8.0), well below the 10.4 reading in November.
• The current account deficit for the third quarter totaled $124.1 billion (Briefing.com consensus -$122.0 billion). The second quarter deficit was revised to $125.2 billion from $128.2 billion.

Exit mobile version