Market Remarks

Morning Notes – Thursday February 18, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower;
  • The odds are for a down day with a good chance of sideways move from pre-open levels – watch for a break above 3913.50 for change of fortunes
  • Key economic data report due during the day:
    • Philly Fed Manufacturing Index ( 23.1 vs.20.3 est.; prev. 26.5) at 8:30 AM
    • Building Permits ( 1.88M vs. 1.67M est.; prev. 1.70M) at 8:30 AM
    • Housing Starts ( 1.58M vs. 1.66M est.; prev. 1.67M) at 8:30 AM
    • Import Prices ( 1.4% vs. 1.0% est.; prev. 0.9%) at 8:30 AM
    • Unemployment ( 861K vs. 775K est.; prev. 793K) at 8:30 AM
    • Consumer Confidence ( -15 est.; prev. -16 ) at 10:00 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 3900.43, 3890.39, and 3884.94
  • Critical resistance levels for S&P 500 are 3924.21, 3933.61, and 3940.88
  • Key levels for E-mini futures: break above 3924.75, the high of 3:30 AM and break below 3904.50, the low of 6:00 AM

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (March 2021) closed at 3928.00 and the index closed at 3931.33 – a spread of about -3.25 points; futures closed at 3928.00 for the day; the fair value is -0.00
  • Pre-NYSE session open, futures are down – at 8:15 AM, S&P 500 futures were down by -16.25; Dow by -111, and NASDAQ by -108.50

Markets Around The World

  • Markets in the East closed mostly lower – Sydney closed up; Shanghai was closed
  • European markets are mostly lower – Germany is higher
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • USD/CAD
    • INR/USD
    • EUR/USD
    • NZD/USD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are mixed
    • Industrial metals are higher
    • Most soft commodities are mostly higher
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.301%, up 17.0 BP from two weeks ago;
    • 30-years is at 2.069%, up 15.7 BP;
    • 2-years yield is at 0.105%, down 1.2 BP;
    • The 10-Year-&-2-Year spread is at 1.196, up from 1.014
  • VIX
    • At 22.59 @ 7:45 AM; up from the last close; above 5-day SMA;
    • Recent high =  37.51 on January 29; low =  19.69 on February 10
    • Sentiment: Risk-Off

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 small red 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 crossing below %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)
  • Drifting down from the all-time high of 3959.25 at 10:00 PM on Monday to around 3910.00; Trending up since 6:00 PM on January 31;
    • RSI-21 around 40 after making a Bullish Divergence
  • At/below EMA10 of EMA50, which is at EMA20
  • Bias: Up-Side
30-Minute (E-mini futures)
    • Moving sideways to down since 11:00 PM on Tuesday
      • RSI-21 moving around 45
      • Below EMA20, which is below EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving down since 11:45 PM;
  • The Bollinger Band is stable with price moving between middle and lower bands
    • Stochastic (9, 1, 3): %K is below %D;
  • Bias: Side-Down

Previous Session

Major U.S. indices closed mostly lower on Wednesday, February 17 in mostly higher volume. Dow Jones Industrial Average closed higher and Dow Jones Transportation Average traded in lower volume. Indices are near all-time highs and made small indecisive candlestick formations.

From Briefing.com:

The S&P 500 (-0.03%) finished flat on Wednesday, battling back from an early 0.8% decline after finding support at the 3900 level. The Dow Jones Industrial Average (+0.3%) eked out a closing record high, while the Nasdaq Composite (-0.6%) and Russell 2000 (-0.7%) closed lower amid profit-taking pressure. […]

Separately, the Fed-sensitive 2-yr yield decreased two basis points to 0.10%, as the FOMC Minutes from the January meeting corroborated the central bank’s dovish monetary policy stance. The U.S. Dollar Index advanced 0.5% to 90.92.

[…]
  • January retail sales surged 5.3% month-month (Briefing.com consensus +0.8%), aided by the receipt of stimulus checks and pent-up spending activity, and more than neutralized the downward revision for December to -1.0% from -0.7%. Excluding autos, retail sales soared 5.9% month-over-month (Briefing.com consensus +0.7%) and more than neutralized any disappointment that might have been attached to the downward revision for December to -1.8% from -1.4%.
  •  […]
  • The Producer Price Index for final demand jumped 1.3% month-over-month in January (Briefing.com consensus +0.5%) — the largest increase since the index began in December 2009 — while the index for final demand, less foods and energy, rose 1.2% month-over-month (Briefing.com consensus +0.2%).
  • […]
  • Industrial production increased 0.9% m/m in January (Briefing.com consensus 0.6%) following a downwardly revised 1.3% increase (from 1.6%) in December. The capacity utilization rate jumped to 75.6% (Briefing.com consensus 74.9%) from an upwardly revised 74.9% (from 74.5%) in December.
  • […]
  • The NAHB Housing Market Index increased to 84 in February (Briefing.com consensus 86.0) from 83 in January.
  • Business inventories increased 0.6% in December (Briefing.com consensus 0.5%) following an unrevised 0.5% increase in November.
  • The weekly MBA Mortgage Applications Index fell 5.1% following a 4.1% decline in the prior week.
[…]
  • Russell 2000 +14.2% YTD
  • Nasdaq Composite +8.4% YTD
  • S&P 500 +4.7% YTD
  • Dow Jones Industrial Average +3.3% YTD
Exit mobile version