Market Remarks

Morning Notes – Friday June 19, 2020

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher
  • The odds are for an up day with elevated volatility; – watch for break below 3120,00 and 3102.00 for change of sentiments
  • Key economic data due:
    • Current Account ( -104B vs. -101B est.; prev. -104B) at 8:30 AM

Directional Bias Before Open:

  • Weekly: Uptrend since March 23 under pressure
  • Daily: Uptrend since March 23 under pressure
  • 120-Min: Up-Side
  • 30-Min: Side
  • 15-Min: Side-Up
  • 6-Min: Up

Key Levels:

  • Critical support levels for S&P 500 are 3119.84, 3098.68 and 3093.51
  • Critical resistance levels for S&P 500 are 3153.45, 3181.49 and 3213.79
  • Key levels for E-mini futures: break above 3147.00, the high of 4:00 AM on June 17 and break below 3102.00, the low of 1:00 AM

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (September 2020) closed at 3103.00 and the index closed at 3115.34 – a spread of about -12.25 points; futures closed at 3098.00 for the day; the fair value is +5.00
  • Pre-NYSE session open, futures are higher – at 8:45 AM, S&P 500 futures were up by +37.50; Dow by +344 and NASDAQ by +103.75

Markets Around The World

  • Markets in the East closed mostly higher – Singapore was down
  • European markets are higher
  • Currencies:
    Up Down
    • EUR/USD
    • AUD/USD
    • NZD/USD
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • INR/USD
  • Commodities:
    Up Down
    • Crude Oil
    • NatGas
    • Gold
    • Silver
    • Copper
    • Platinum
    • Sugar
    • Cotton
    • Cocoa
    • Palladium
    • Coffee
  • Bond
    • 10-yrs yield is at 0.733%, up from June 18 close of 0.694;
    • 30-years is at 1.517%,up from 1.461%
    • 2-years yield is at 0.202% up from 0.198%
    • The 10-Year-&-2-Year spread is at 0.531 up from 0.496
  • VIX
    • Is at 31.05; down -1.89 from June 18 close; below 5-day SMA;
    • Recent high 44.44 on June 15; low 23.54 on June 5
    • Sentiment: Risk-On

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

Monthly
  • Uptrend under pressure
  • May 2020 was a green candle with small upper shadow and a lower shadows that was one third of the real body;
    • Stochastic %K is above %D and above 60; %K Bearish Divergence in January
    • RSI-9 turning up after declining to 34.91, the lowest level since April 2009, from above 75 in January and Bearish Divergence
    • Regaining the middle band of the 120-month regression channel after only third break of channel since 2009 and first close below it
  • Sequence of higher highs and higher lows broken
Weekly:
  • The week ending on June 12 was a large red candle that could pass as an almost Bearish Engulfing formation; small upper and lower shadows but in comparison to the real body
    • Stochastic (9,1, 3): %K is below %D;
    • RSI (9) turned down to near 50
  • The week was down -152.62 or -4.8%; the 5-week ATR is 167.57
  • The weekly week pivot point =3086.30, R1=3188.14, R2=3334.96; S1=2939.48, S2=2837.65; S1 pivot level was breached
  • A down week; second in last five weeks and fourth in last ten weeks
  • All time high of 3393.52, the last swing high, was during the week of February 17; broke below the low of the week of December 24, 2018; support near 2193.81, the high during the week of August 15, 2016; sequence of higher highs and higher lows broken
  • Above 10-week EMA; at/below 39-week SMA; above 89-week SMA
  • Uptrend since March 23 is under pressure
Daily
  • A small green candle that opened below Wednesday’s close but closed slightly above it
    • %K is at %D but moving down;
    • RSI-9 is above 50; below 8-day RSI;
  • Above 20-day EMA; above 200-day SMA, above 50-day EMA and 100-day
  • Uptrend since March 23 is under pressure
2-Hour (E-mini futures)
  • Moving sideways since 10:00 PM on Monday
    • RSI-21 has moved up above 60 from near 35
    • %K is crisscrossing %D higher
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving sideways since 10:30 PM on June 15; breaking above a descending triangle – resistance is at 3147.00; 61.8% extension target is near 3189.00 and 100% extension target is near 3224.00
    • RSI-21 above 50 since 10:00 AM on Thursday
    • %K is crisscrossing %D higher;
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side
15-Minute (E-mini futures)
  • Bollinger Band (20, 2.0) moving sideways to up since 10:45 AM on June 18
  • The Bollinger Band is relatively stable; price is walking up the upper band
    • Stochastic (9, 1, 3): %K is crisscrossing %D
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mixed on Thursday, June 18 in lower volume. Dow Jones Industrial Average, Dow Jones Transportation Average and NYSE Composite closed down. S&P 500, NASDAQ Composite, Russell 2000 and Wilshire 5000 Total Market Index closed up. Day’s range was relatively small.

From Briefing.com:

The S&P 500 increased 0.1% on Thursday after trading near its flat line for most of the session amid mixed economic signals. The Dow Jones Industrial Average (-0.2%), Nasdaq Composite (+0.3%), and Russell 2000 (unch) also closed little changed.

[…]

U.S. Treasuries finished mixed with longer-dated tenors closing higher. The 2-yr yield was unchanged at 0.19%, while the 10-yr yield declined four basis points to 0.69%. The U.S. Dollar Index increased 0.3% to 97.47 amid relative weakness in the British pound after the Bank of England increased its asset purchase program to GBP745 billion.

  • Initial jobless claims for the week ending June 13 were higher than expected (and still high) at 1.508 million (Briefing.com consensus 1.350 million) versus 1.566 million in the prior week. Continuing jobless claims for the week ending June 6 decreased by 62,000 to 20.544 million.
[…]
  • The Conference Board’s Leading Economic Index (LEI) increased 2.8% in May (Briefing.com consensus 2.5%) following a downwardly revised 6.1% decline (from -4.4%) in April. It was the first increase in the LEI since January.
[…]
  • The Philadelphia Fed Index for June unexpectedly increased to 27.5 (Briefing.com consensus -25.0) from -43.1 in May.

 

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