Market Remarks

Morning Notes – Wednesday April 14, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher
  • The odds are for an up to sideways day – watch for a break above 4139.75 and a break below 4132.75 for clarity
  • Key economic data report due during the day:
    • Import Prices ( 1.0% est.; prev. 1.3%) at 8:30 AM
    • Beige Book at 2:00 PM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4128.99, 4118.21, and 4107.70
  • Critical resistance levels for S&P 500 are 4148.00, 4151.58, and 4161.58
  • Key levels for E-mini futures: break above 4139.75, the high of 3:00 PM on Tuesday and break below 4132.75, the low of 2:15 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (June 2021) closed at 4132.50 and the index closed at 4141.59 – a spread of about -9.00 points; futures closed at 4132.75 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures are higher – at 7:45 AM, S&P 500 futures were up by +4.75; Dow by +14, and NASDAQ by +49.25

Markets Around The World

  • Markets in the East closed mostly higher – Tokyo was lower and Mumbai was closed
  • European markets are mostly higher – Germany is lower
  • Currencies (from two weeks ago):
    Up Down
    • EUR/USD
    • INR/USD
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • USD/CAD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are higher
    • Industrial metals are mostly lower
    • Most soft commodities are mostly higher
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.623%, down -10.3 basis points from two weeks ago;
    • 30-years is at 2.307%, down -8.9 basis points;
    • 2-years yield is at 0.157%, up +0.9 basis points;
    • The 10-Year-&-2-Year spread is at 1.466, down from 1.578
  • VIX
    • At 16.65 @ 7:45 AM; unchnaged from the last close; at/below 5-day SMA;
    • Recent high =  23.55 on March 25; low =  16.20 on April 9
    • Sentiment: Risk-Neutral

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

Monthly
  • Confirmed Uptrend
  • March 2021 was a green candle with a small upper shadow and a lower shadow almost equal to the real body; at all-time closing and intra-month highs;
    • Stochastic %K above %D near 100;
    • RSI-9 near 75; 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 April 9 was a green candle breaking away from previous weeks; almost no upper and lower shadows; at all-time highs
    • Stochastic (9,1, 3): %K is above %D; near 100
    • RSI (9) is near 75
  • The week was up +108.93 or +2.7%; the 5-week ATR is 109.96
  • An up week; fourth in the last five weeks, and seventh in the last ten weeks
  • The weekly week pivot point=4160.71, R1=4192.61, R2=4255.75; S1=4065.67, S2=4002.53; R1/R2/R3 pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A relatively small Spinning Top candle at all-time intraday and closing highs
    • Broke above a symmetrical triangle at 3550.00 level on November 9; the 161.8% extension target near 4140.00 levels is achieved
    • %K is below %D; near 100
    • RSI-9 is above 80; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Trending up since 10:00 AM on March 25; at all-time highs;
    • Broke above a down-sloping flag on March 26; the 100% extension target near 4100.00 is achieved; the 161.8% extension target is near 4260.00
    • RSI-21 is around 65 after making few Bearish Divergences in the last few days
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
  • Moving sideways to up since 2:30 PM on April 13;
    • RSI-21 is near 60
    • Above EMA 20, which is above EMA10 of EMA50
  • Bias: Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving up since 9:45 PM
  • The Bollinger Band is relatively narrow and stable
    • Stochastic (9, 1, 3): %K is above %D above 80
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mixed on Tuesday, April 13 in mostly higher volume. S&P 500, NASDAQ Composite, and Wilshire 5000 Total Market closed higher and S&P 500 traded in lower volume. Indices mostly traded within a narrow range during the day.

From Briefing.com:

The S&P 500 (+0.3%) set intraday and closing record highs on Tuesday, even after the FDA and CDC recommended that states pause use of Johnson & Johnson’s (JNJ 159.48, -2.16, -1.3%) COVID-19 vaccine. The mega-caps and growth stocks did the heavy lifting, as long-term interest rates moved lower following better-than-feared CPI data for March.

The Nasdaq Composite outperformed with a 1.1% gain, while the Dow Jones Industrial Average (-0.2%) and Russell 2000 (-0.2%) nearly recouped all of their intraday losses.

[…]

Sure, the cyclical financials (-0.9%), industrials (-0.5%), and materials (-0.2%) sectors closed lower, but losses were relatively tame in front of Q1 earnings from the banks tomorrow morning.

[…]

The 10-yr yield decreased five basis points to 1.62% after touching 1.70% overnight. The 2-yr yield was unchanged at 0.16%. The U.S. Dollar Index decreased 0.3% to 91.83. WTI crude futures increased 0.8%, or $0.49, to $60.18/bbl.

[…]
  • Total CPI increased 0.6% month-over-month in March (Briefing.com consensus 0.5%) — the largest monthly increase since August 2012 — following a 0.4% increase in February. Core CPI increased 0.3% m/m (Briefing.com consensus 0.2%) following a 0.1% increase in February. On a year-over-year basis, total CPI was up 2.6% unadjusted versus 1.7% in February. Core CPI was up 1.6% following a 1.3% increase in February. Over the last six months, total CPI is up 3.6% at an annualized rate on a seasonally adjusted basis, whereas core CPI is up only 1.4%.
  • […]
  • The NFIB Small Business Optimism Index for March increased to 98.2 from 95.8 in February.
[…]
  • Russell 2000 +12.9% YTD
  • S&P 500 +10.3% YTD
  • Dow Jones Industrial Average +10.0% YTD
  • Nasdaq Composite +8.6% YTD

Overseas: 

  • Europe: DAX +0.1%, FTSE unch, CAC +0.4%
  • Asia: Nikkei +0.7%, Hang Seng +0.3%, Shanghai -0.5%

Commodities: 

  • Crude Oil +0.73 @ 60.34
  • Nat Gas +0.07 @ 2.63
  • Gold +15.20 @ 1748.00
  • Silver +0.55 @ 25.41
  • Copper +0.01 @ 4.03
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