Morning Notes – Tuesday June 30, 2020

/ June 30, 2020

Directional Bias For The Day:

  • S&P Futures are lower
  • The odds are for a sideways to down day with elevated volatility; – watch for break above 3055.25 for change of sentiments
  • Key economic data due:
    • S&P/CS Composite-20 HPI ( 3.8% est.; prev. 3.9%) at 9:00 AM
    • Chicago PMI ( 45.0 est.; prev. 32.3) at 9:45 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3032.27, 3015.62 and 2999.74
  • Critical resistance levels for S&P 500 are 3053.52, 3062.94 and 3086.25
  • Key levels for E-mini futures: break above 3055.25, the high of 7:30 AM and break below 3030.25, the low of 5:00 AM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (September 2020) closed at 3043.50 and the index closed at 3053.24 – a spread of about -9.75 points; futures closed at 3047.75 for the day; the fair value is -4.25
  • Pre-NYSE session open, futures are lower – at 8:15 AM, S&P 500 futures were down by -5.75; Dow by -63 and NASDAQ by -9.25

Markets Around The World

  • Markets in East closed mostly higher – Mumbai was down
  • European markets are mostly lower – Germany is up
  • Currencies:
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CAD
    • INR/USD
    • EUR/USD
    • GBP/USD
    • USD/CHF
    • AUD/USD
    • NZD/USD
  • Commodities:
    Up Down
    • NatGas
    • Silver
    • Copper
    • Platinum
    • Sugar
    • Coffee
    • Cotton
    • Crude Oil
    • Gold
    • Palladium
    • Cocoa
  • Bond
    • 10-yrs yield closed at 0.621%, down from June 29 close of 0.625;
    • 30-years is at 1.370% down from 1.379%
    • 2-years yield is at 0.145% down from 0.161%
    • The 10-Year-&-2-Year spread is at 0.476 up from 0.464
  • VIX
    • Is at 32.02; up +0.24 from June 29 close; below 5-day SMA;
    • Recent high 44.44 on June 15; low 29.26 on June 23
    • Sentiment: Risk-Neutral

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 26 was a red Dark Cloud Cover type of candle but not at the high with upper shadow one third of the real body and almost no lower shadow
    • Stochastic (9,1, 3): %K is below %D;
    • RSI (9) is near 50
  • The week was down 88.69 or -2.9%; the 5-week ATR is 176.44
  • The weekly week pivot point =3056.19, R1=3107.76, R2=3206.46; S1=2947.49, S2=2905.92; No pivot levels were breached
  • A down week; second in last five weeks and fifth 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
  • At/below 10-week EMA; at/above 39-week SMA; above 89-week SMA
  • Uptrend since March 23 is under pressure
Daily
  • A green Harami candle within a red candle; almost no upper shadow and small lower shadow; bouncing off EMA50 and SMA200;
    • %K is below %D but turning up;
    • RSI-9 turning up below 50; below 8-day RSI;
  • Below 20-day EMA; a/above 200-day SMA, at/above 50-day EMA; above 100-day
  • Uptrend since March 23 is under pressure
2-Hour (E-mini futures)
  • Moving sideways to down since 10:00 PM on June 15; broke below a horizontal trading range between 3160.00 and 3000.00; bounced from lower bound to 3060.00
    • RSI-21 rising since 2:00 PM on June 26 after making a Bullish Divergence
    • %K is crisscrossing %D lower
  • At/above EMA20; at/aboveEMA10 of EMA50
  • Bias: Side
30-Minute (E-mini futures)
  • Moving down since 8:00 AM on Tuesday from 3145.75 to 3005.00 by 3:00 AM; broke below a horizontal channel – between 3147.00 and 3064.00 – since June 15;
    • RSI-21 rising since 11:30 AM on Wednesday; Bullish Divergence at 3:00 AM; below 40
    • %K is below %D;
  • Below EMA20, which is below EMA10 of EMA50
  • Bias: Down-Side
15-Minute (E-mini futures)
  • Bollinger Band (20, 2.0) moving sideways to down since 9:45 PM
  • The Bollinger Band relatively stable
    • Stochastic (9, 1, 3): %K is below %D
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Monday, June 29 in lower volume. All S&P sectors closed up. Indices opened up and then mostly traded higher during the day.

From Briefing.com:

The S&P 500 increased 1.5% on Monday in a broad-based advance to recoup some of last week’s decline. The Dow Jones Industrial Average (+2.3%) and Russell 2000 (+3.1%) outperformed the benchmark index, while the Nasdaq Composite (+1.2%) underperformed.

All 11 S&P 500 sectors finished in positive territory, led by the industrials sector (+3.2%) amid leadership from Boeing (BA 194.49, +24.48, +14.4%), which resumed 737 MAX flights for certification. The health care sector (+0.9%) was the lone sector that rose less than 1.0%.

[…]

The 2-yr yield was unchanged at 0.16%, and the 10-yr yield was unchanged at 0.64%. The U.S. Dollar Index increased 0.1% to 97.51. WTI crude rose 3.1%, or $1.18, to $39.67/bbl.
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