Market Remarks

Morning Notes – Thusday April 15, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher
  • The odds are for an up day with a good chance of sideways move from pre-open levels around 4140.00 – watch for a break above 4146.00 and a break below 4134.75 for clarity
  • Key economic data report due during the day:
    • Retail Sales ( 9.8% vs. 5.8% est.; prev. -3.0%) at 8:30 AM
    • Core Retail Sales (8.4% vs. 5.1% est.; prev. -2.7%) at 8:30 AM
    • Philly Fed Manufacturing Index ( 50.2 vs. 41.0 est.; prev. 51.8) at 8:30 AM
    • Unemployment Claims ( 576K vs. 703K est.; prev. 769K) at 8:30 AM
    • Capacity Utilization rate ( 75.6% est.; prev. 73.8%) at 9:15 AM
    • Industrial Production ( 2.7% est.; prev. -2.2%) at 9:15 AM
    • Business Inventories ( 0.5% est.; prev. 0.3%) at 10:00 AM
    • NAHB Housing Market Index (84 est.; prev. 82) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4137.93, 4120.87, and 4107.70
  • Critical resistance levels for S&P 500 are 4145.69, 4163.23, and 4174.76
  • Key levels for E-mini futures: break above 4146.00, the high of 8:30 AM and break below 4134.75, the low of 6:00 AM

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (June 2021) closed at 4120.00 and the index closed at 4124.66 – a spread of about -5.00 points; futures closed at 4118.00 for the day; the fair value is +2.00
  • Pre-NYSE session open, futures are higher – at 8:30 AM, S&P 500 futures were up by +24.75; Dow by +167, and NASDAQ by +126.00

Markets Around The World

  • Markets in the East closed mostly higher – Shanghai and Hong Kong closed down
  • European markets are higher
  • Currencies (from two weeks ago):
    Up Down
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • INR/USD
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are mixed
    • Industrial metals are mostly higher
    • Most soft commodities are mostly higher
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.638%, down -10.8 basis points from two weeks ago;
    • 30-years is at 2.325%, down -10.0 basis points;
    • 2-years yield is at 0.157%, down -0.7 basis points;
    • The 10-Year-&-2-Year spread is at 1.481, down from 1.582
  • VIX
    • At 16.80 @ 7:45 AM; down from the last close; at/below 5-day SMA;
    • Recent high =  23.55 on March 25; low =  15.38 on April 14
    • Sentiment: Risk-On

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 Bearish Engulfing candle from 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; just above 80
    • RSI-9 is just above 70; below 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; sideways since 2:00 PM on April 13
    • 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 near 65; below a down-trending line from April 2; made few Bearish Divergences in the last few days
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
  • Moving up since 3:30 PM on April 14 after declining during the day from the all-time high;
    • RSI-21 is just above 60
    • Above EMA 20, which is above EMA10 of EMA50
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving up since 12:45 AM
  • The Bollinger Band is narrowing after expanding from 2:30 Am to 7:00 AM; the price at the upper bound
    • Stochastic (9, 1, 3): %K is crossing below %D from above 90
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mixed on Wednesday, April 14 in mixed volume. S&P 500, NASDAQ Composite, and Wilshire 5000 Total Market closed lower. Dow Jones Industrial Average and Dow Jones Transportation Average traded in lower volume. Indices mostly traded within a narrow range during the day and most made Bearish Engulfing candle formations.

From Briefing.com:

The S&P 500 declined 0.4% on Wednesday, as investors appeared to take profits in the heavily-weighted growth stocks […]

The Nasdaq Composite (-1.0%) underperformed with a 1.0% decline. The Dow Jones Industrial Average (+0.2%) and Russell 2000 (+0.8%),

[…]

The overall tone of their reports was well-received by other banks and reopening stocks within the S&P 500 financials (+0.7%), energy (+2.9%), materials (+0.7%), and industrials (+0.1%) sectors. Energy stocks got an added boost from a 5% gain in crude prices ($63.18, +3.00, +5.0%) amid bullish inventory data from the EIA.

[…]

The information technology (-1.2%), consumer discretionary (-1.2%), and communication services (-0.9%) sectors, where the recently-hot mega-caps reside, were the weakest performers.

[…]

The 10-yr yield settled the session two basis points higher at 1.64% after trading slightly higher prior to the Beige Book’s release. The 2-yr yield decreased one basis to 0.15%. The U.S. Dollar Index decreased 0.2% to 91.64.

[…]
  • Import prices increased 1.2% in March while import prices excluding oil increased 0.8%. Export prices increased 2.1% in March while export prices excluding agriculture increased 2.0%.
  • The MBA Mortgage Applications Index decreased 3.7% following a 5.1% decline in the prior week.
[…]
  • Russell 2000 +13.8% YTD
  • Dow Jones Industrial Average +10.2% YTD
  • S&P 500 +9.8% YTD
  • Nasdaq Composite +7.5% YTD

Overseas: 

  • Europe: DAX -0.2%, FTSE +0.7%, CAC +0.4%
  • Asia: Nikkei -0.4%, Hang Seng +1.4%, Shanghai +0.6%

Commodities: 

  • Crude Oil +2.67 @ 63.03
  • Nat Gas -0.01 @ 2.62
  • Gold -12.60 @ 1735.40
  • Silver +0.05 @ 25.47
  • Copper +0.10 @ 4.13

After-Hours Spotlight:

  • Allegion (ALLE) files mixed securities shelf offering… ALLE flat
  • American Eagle (AEO) issues upside Q1 revenue guidance, noting that demand has accelerated across the American Eagle and Aerie brands… AEO up 4.3%
  • Bristol-Myers (BMY) receives EC approval for Opdivo in combination with Cabometyx as first-line treatment for patients with advanced renal cell carcinoma… BMY up 0.3%
  • Cimpress (CMPR) guides MarQ revs above single analyst estimate… CMPR up 5.7%
  • Costco (COST) increases quarterly dividend to $0.79/share from $0.70/share; new yield is 0.9%… COST up 0.3%
  • Dell (DELL) announces planned spin-off of 81% equity ownership of VMware (VMW)… DELL up 8.4%
  • Ethan Allen (ETH) guides MarQ EPS above dual-analyst estimate… ETH down 2.6%
  • Las Vegas Sands (LVS) launching advertising campaign to bring casinos to Texas, according to Texas Tribune… LVS up 0.3%
  • TEGNA (TGNA) guides Q1 revs above consensus… no after hours indication for TGNA

Fair Value for Thursday, April 15:

  • S&P 500: 4,116
  • Nasdaq 100: 13,793
  • DJIA: 33,616
[…]
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