Market Remarks

Morning Notes – Wednesday March 31, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher
  • The odds are for a sideways day – watch for a break above 3958.25 and below 3941.50 for clarity
  • Key economic data report due during the day:
    • ADP Non-Farm Employment Change ( 517K vs. 552K est.; prev. 176K) at 8:15 AM
    • Chicago PMI ( 61.2 est.; prev. 59.5) at 9:45 AM
    • Pending Home Sales ( -3.1% est.; prev. -2.8%) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3948.77, 3944.35, and 3917.63
  • Critical resistance levels for S&P 500 are 3968.01, 3981.12, and 3993.25
  • Key levels for E-mini futures: break above 3958.25, the high of 3:00 PM on Tuesday and break below 3941.50, the low of 2:00 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (June 2021) closed at 3952.00 and the index closed at 3958.55 – a spread of about -6.50 points; futures closed at 3947.75 for the day; the fair value is +4.25
  • Pre-NYSE session open, futures are mixed – at 8:15 AM, S&P 500 futures were up by +7.00; Dow down by -15, and NASDAQ up by +94.75

Markets Around The World

  • Markets in the East closed mostly lower – Sydney was up
  • European markets are mixed
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • INR/USD
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are lower
    • Industrial metals are lower
    • Most soft commodities are mostly lower
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.726%, up +10.5 basis points from two weeks ago;
    • 30-years is at 2.396%, up +0.5 basis points;
    • 2-years yield is at 0.148%, down -0.5 basis points;
    • The 10-Year-&-2-Year spread is at 1.578, up from 1.468
  • VIX
    • At 19.71 @ 7:45 AM; up from the last close; at/above 5-day SMA;
    • Recent high =  23.90 on March 19; low =  18.68 on March 26
    • Sentiment: Risk-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 March 26 was a green candle almost like a Bullish Engulfing pattern; at the all-time high close
    • Stochastic (9,1, 3): %K is crossing above %D
    • RSI (9) is above 65
  • The week was up +61.44 or +1.6%; the 5-week ATR is 138.62
  • An up week; third in the last five weeks, and sixth in the last ten weeks
  • The weekly week pivot point=3935.41, R1=4017.32, R2=4060.10; S1=3892.63, S2=3810.72; R1/S1 pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A small Doji just below the previous day’s Doji
    • 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 from above 90
    • RSI-9 is just below 60; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Drifting sideways to down since 2:00 PM on March 26
    • Broke above a down-sloping flag on March 26; the  61.8% extension target is near 4002.00 and 100% extension target is hear 4100.00;
    • RSI-21 rising from below 50 to just below 60
  • At/below EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
    • Drifting sideways to down since 1:00 PM on Monday
      • RSI-21 just above 50
      • At/above EMA10 of EMA50, which is at/above EMA20
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is drifting sideways to down since 6:45 PM on Monday
  • The Bollinger Band is stable and narrow
    • Stochastic (9, 1, 3): %K is crisscrossing %D around 80
  • Bias: Side

Previous Session

Major U.S. indices closed mixed on Tuesday, March 30 in mostly lower volume. Russell 2000, Dow Jones Transportation Average, and NYSE Composite closed higher and DTRAN traded in higher volume. Indices opened lower and then mostly traded within a range moving sideways.

From Briefing.com:

The S&P 500 (-0.3%), Nasdaq Composite (-0.1%), and Dow Jones Industrial Average (-0.3%) closed slightly lower on Tuesday in a relatively lackluster session. The Russell 2000 rose 1.7% to bounce back from yesterday’s 3% drop. […]

The consumer discretionary (+0.8%), financials (+0.7%), and industrials (+0.4%) sectors closed higher. but the other eight S&P 500 sectors closed lower. The defensive-oriented information technology (-1.0%), consumer staples (-1.1%), utilities (-0.9%), and health care (-0.9%) sectors underperformed with 1% declines.

[…]

The 10-yr yield settled one basis point higher at 1.73% after nearly touching 1.78% prior to the open.

[…]

The 2-yr yield was unchanged at 0.14%. The U.S. Dollar Index increased 0.4% to 93.28. WTI crude futures fell 1.6%, or $0.98, to $60.57/bbl.

[…]
  • The Conference Board’s Consumer Confidence Index jumped to 109.7 in March (Briefing.com consensus 97.0) from a downwardly revised 90.4 (from 91.3) in February.
  • […]
  • The FHFA Housing Price Index increased 1.0% m/m in January following an upwardly revised 1.2% increase in December (from 1.1%).
  • The S&P Case-Shiller Home Price Index increased 11.1% y/yr in January (Briefing.com consensus 11.0%) following an upwardly revised 10.2% increase in December (from 10.1%).
[…]
  • Russell 2000 +11.2% YTD
  • Dow Jones Industrial Average +8.0% YTD
  • S&P 500 +5.4% YTD
  • Nasdaq Composite +1.2% YTD
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