Morning Notes – Monday November 30, 2020

/ November 30, 2020

Directional Bias For The Day:

  • S&P Futures are lower;
  • The odds are for a sideways to down day – watch for the break above 3635.50 and the break below 3621.50 for clarity
  • Key economic data report:
    • Chicago PMI ( 59.4 est.; prev. 61.1) at 9:45 M
    • Pending Home Sales ( 1.1% est.; prev. -2.2% ) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3617.76, 3594.52, and 3572.96
  • Critical resistance levels for S&P 500 are 3639.21, 3645.99, and 3652.31
  • Key levels for E-mini futures: break above 3632.50, the high of 7:30 AM and break below 3621.50, the low of 6:30 AM

Pre-Open

  • On Friday at 1:00 PM, S&P futures (December 2020) closed at 3637.00 and the index closed at 3638.35 – a spread of about -1.25 points; futures closed at 3636.50 for the day; the fair value is +0.50
  • Pre-NYSE session open, futures are mixed – at 9:00 AM, S&P 500 futures were down by -5.50; Dow down by -118, and NASDAQ up by +25.75

Markets Around The World

  • Markets in the East closed lower – Mumbai was closed for trading
  • European markets are mixed – Germany, Switzerland, and STOXX 600 are up; U.K., France, Spain, and Italy are down
  • Currencies:
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • Dollar index
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • INR/USD
  • Commodities:
    • Energy is up
    • Precious metals are down
    • Industrial metals are mostly up
    • Most soft commodities are down
  • Treasuries
    • 10-years yield closed at 0.850, down the last close of 0.878%;
    • 30-years is at 1.583% down from 1.620%
    • 2-years yield is at 0.157% down from 0.168%
    • The 10-Year-&-2-Year spread is at 0.693 down from 0.710
  • VIX
    • At 21.94 @ 8:30 AM; up +1.10 from the last close; above 5-day SMA;
    • Recent high =  27.27 on November 12; low =  19.51 on November 27
    • Sentiment: Risk-Neutral

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

Monthly
  • Uptrend under pressure
  • October 2020 was a red candle with long upper shadow and smaller lower shadows;
    • Stochastic %K is below %D from above 90; potential %D Bearish Divergence
    • RSI-9 below 60 from near 70; below a downtrend line that it broke above briefly in August
    • Retreating from the upper band of a 120-month regression channel;
  • The sequence of higher highs and higher lows is resumed
Weekly:
  • The week ending on November 27 was a green candle that opened just above previous weeks’ close and closed above it high; small lower shadow and almost no upper shadow; all-time closing high but not the intraday high;
    • Stochastic (9,1, 3): %K crossed above %D; near 90
    • RSI (9) is near 65
  • The week was up +80.81 or +2.3%; the 5-week ATR is 160.66
  • An up week following a down week; third in the last five weeks and sixth in the last ten weeks
  • The weekly week pivot point=3611.81, R1=3670.85, R2=3703.35; S1=3579.31, S2=3520.27; R1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23 Resumed
Daily
  • A small Doji candle; sideways move for the past few days near all-time high;
  • Broke above a symmetrical triangle on November 9; 50% extension target is near 3710.00; 61.8% extension target is near 3750.00; 100% extension target is near 3900.00
    • %K is above %D above 90
    • RSI-9 moving sideways above 65; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Confirmed Uptrend
2-Hour (E-mini futures)
  • Sideways to down since 12:00 PM on November 24;
    • RSI-21 declining in steps from above 80 to below 30
  • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Side
30-Minute (E-mini futures)
  • Moving sideways to down since 11:30 AM on November 24; in the middle of a Horizontal Channel between 3652.00 and 3615.25 after breaching it to the downside couple of times
    • RSI-21 is just above 50 after bouncing from near 30
    • %K is crisscrossing %D lower
  • At/above EMA20; which is at/below EMA10 of EMA50
  • Bias: Side-Down
15-Minute (E-mini futures)
  • Bollinger Band (20, 2.0) is moving up since 3:45 AM after declining from 6:00 PM on Sunday
  • The Bollinger Band is stable but relatively larger since 3:45 AM
    • Stochastic (9, 1, 3): %K is crisscrossing %D lower
  • Bias: Side-Down

Previous Session

Major U.S. indices closed mostly higher on Friday, November 27 in lower volume. The trading day was shortened following the Thanksgiving Thursday. Mosty indices moved sideways on two trading days on either side of the Holiday following a bullish move on Tuesday.

For the week, the major indices closed higher in lower volume. The week had three and a half-day of trading. Markets in Europe and Asia closed higher. Dollar-index and Japanese Yen were down Euro and commodity currencies closed higher. Energy, industrial metals, and soft commodities were up but precious metals were down. Treasury yields moved higher. All S&P sectors except Real Estate closed up for the week.

From Briefing.com:

The S&P 500 (+0.2%) and Nasdaq Composite (+0.9%) closed at fresh record highs on Friday in a shortened trading session. The Russell 2000 increased 0.6%, and the Dow Jones Industrial Average increased 0.1%.

[…]

From a sector perspective, the S&P 500 health care (+1.0%), communication services (+0.6%), and information technology (+0.5%) sectors did the heavy lifting, while the energy (-1.3%) and utilities (-1.0%) sectors declined the most with 1% losses.

[…]

Ahead of the bond market close at 2:00 p.m. ET, the 2-yr yield was down two basis points to 0.14%, and the 10-yr yield was down three basis points to 0.85%. The U.S. Dollar Index was down 0.2% to 91.82. WTI crude futures were down 0.7% to $45.39/bbl.

[…]
  • Nasdaq Composite +36.0% YTD
  • S&P 500 +12.6% YTD
  • Russell 2000 +11.2% YTD
  • Dow Jones Industrial Average +4.8% YTD
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