Market Remarks

Morning Notes – Tuesday February 16, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher;
  • The odds are for a sideways to an up day – watch for a break above 3954.00 and break below 3928.50 for clarity
  • Key economic data report due during the day:
    • Empire State Manufacturing Index ( 12.1 vs. 6.2 est.; prev. 3.5) at 8:30 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3922.41, 3914.02, and 3905.78
  • Critical resistance levels for S&P 500 are 3946.11, 3957.40, and 3977.56
  • Key levels for E-mini futures: break above 354.00, the high of 7:00 AM and break below 3928.50, the high of 8:30 AM on February 10

Pre-Open

  • On Friday at 4:00 PM, S&P futures (March 2021) closed at 3930.75 and the index closed at 3934.83 – a spread of about -4.75 points; futures closed at 3931.00 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures are higher – at 9:00 AM, S&P 500 futures were up by +11.75; Dow by +91, and NASDAQ by +34.25

Markets Around The World

  • Markets in the East closed mostly higher – Mumbai was down; Shanghai was closed
  • European markets are mostly lower – the UK is up
  • Currencies (from two weeks ago):
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • Dollar index
    • USD/CHF
    • USD/CAD
    • INR/USD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are lower
    • Industrial metals are higher
    • Most soft commodities are mostly lower
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.257%, up 18.0 BP from two weeks ago;
    • 30-years is at 2.067%, up 22.0 BP;
    • 2-years yield is at 0.109%, down 0.4 BP;
    • The 10-Year-&-2-Year spread is at 1.148, up from 0.964
  • VIX
    • At 21.09 @ 8:15 AM; up from the last close; below 5-day SMA;
    • Recent high =  37.51 on January 29; low =  19.69 on February 10
    • Sentiment: Risk-On-Neutral

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

Monthly
  • Confirmed Uptrend
  • December 2020 was a green candle with a small gap and with almost no upper and lower shadows; all-time closing and intraday highs;
    • Stochastic %K above %D near 100;
    • RSI-9 above 70; broke above a downtrend line from January 2018
    • Above the upper band of a 120-month regression channel;
  • The sequence of higher highs and higher lows is resumed
Weekly:
  • The week ending on February 12 was a relatively small green candle at the all-time highs with almost no upper and lower shadows;
    • Stochastic (9,1, 3): %K is above %D; near 100
    • RSI (9) is near 70
  • The week was up +48.00 or +1.2%; the 5-week ATR is 115.53
  • An up week; third in the last five weeks and sixth in the last ten weeks
  • The weekly week pivot point=3919.00, R1=3953.06, R2=3971.29; S1=3900.77, S2=3866.71; No pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A Bullish Engulfing candle with small lower and upper shadows
  • Broke above a symmetrical triangle at 3550.00 level on November 9; the 100% extension target near 3900.00 is achieved; 161.8% extension target is near 4140.00 levels
    • %K  is above %D; above 90;
    • RSI-9 is near 70; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Confirmed Uptrend
2-Hour (E-mini futures)
  • Moving up since 6:00 PM on January 31; drifting sideways to up since 8:00 PM on Sunday
    • RSI-21 has declined from above 80 to below 65
  • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
    • Moving sideways to up since 7:00 PM on Sunday
      • RSI-21 has drifted to 55 from above 65
      • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is drifting down 11:00 PM on Monday;
  • The Bollinger Band is expanding since 8:00 AM with price walking down the lower band
    • Stochastic (9, 1, 3): %K is below %D; below 20
  • Bias: Side-Down

Previous Session

Major U.S. indices closed higher on Friday, February 12 in mostly lower volume. S&P 500 traded in higher volume. There was no trading on Monday on account of Presidents Day. Indices continue to make all-time highs.

For the week, the US indices closed higher on lower volume. Markets in Europe and Asia were mixed. The Dollar index closed down, energy, precious metals, and industrial metals closed higher but the soft commodities were mixed. The US Treasury yields were up for the week.

From Briefing.com:

The S&P 500 (+0.5%), Nasdaq Composite (+0.5%), and Dow Jones Industrial Average (+0.1%) closed at record highs on Friday, thanks to a strong finish ahead of a three-day weekend. The Russell 2000 increased 0.2%. […]

The higher oil prices and Treasury yields contributed to the relative strength in the S&P 500 energy (+1.4%) and financials (+1.0%) sectors, which were joined by the materials (+1.0%), industrials (+0.7%), and health care (+0.8%) sectors atop the standings.

[…]

On the downside, the utilities (-0.8%) and real estate (-0.1%) sectors lagged in negative territory.

[…]

The 2-yr yield decreased one basis point to 0.10%. The U.S. Dollar Index increased 0.1% to 90.46. The CBOE Volatility Index fell 6.0% to 19.97.

[…]
  • The preliminary February reading of the University of Michigan Index of Consumer Sentiment fell to 76.2 (Briefing.com consensus 80.8) from the final reading of 79.0 in January.
  • […]
[…]
  • Russell 2000 +15.9% YTD
  • Nasdaq Composite +9.4% YTD
  • S&P 500 +4.8% YTD
  • Dow Jones Industrial Average +2.8% YTD
Exit mobile version