Market Remarks

Morning Notes – Tuesday April 27, 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 4186.75  and a break below 4176.25 for clarity
  • Key economic data report due during the day:
    • HP ( 1.0% est.; prev. 1.0%) at 9:00 AM
    • S&P/CS Composite-20 HPI ( 11.8% est.; prev. 11.1% ) at 9:00 AM
    • CB Consumer Confidence (113.1 est.; prev. 109.7) at 10:00 AM
    • Richmond Manufacturing Index ( 22 est.; prev. 17) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4182.36, 4168.34, and 4161.99
  • Critical resistance levels for S&P 500 are 4194.19, 4199.89, and 4205.58
  • Key levels for E-mini futures: break above 4186.75, the high of 4:00 AM and break below 4176.25, the low of 5:45 AM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (June 2021) closed at 4180.25 and the index closed at 4187.62 – a spread of about -7.50 points; futures closed at 4179.50 for the day; the fair value is +0.75
  • Pre-NYSE session open, futures are higher – at 8:00 AM, S&P 500 futures were up by +3.50; Dow by +2, and NASDAQ by +18.75

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Mumbai, and Singapore were up; Hong Kong, Toky, Sydney, and Seoul were down
  • European markets are lower
  • Currencies (from two weeks ago):
    Up Down
    • EUR/USD
    • AUD/USD
    • NZD/USD
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • INR/USD
  • Commodities (from two weeks ago):
    • Energy futures are mixed
    • Precious metals are higher
    • Industrial metals are higher
    • Most soft commodities are mostly higher
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.570%, down -10.5 basis points from two weeks ago;
    • 30-years is at 2.244%, down -10.3 basis points;
    • 2-years yield is at 0.176%, up +1.1 basis points;
    • The 10-Year-&-2-Year spread is at 1.394, down from 1.510
  • VIX
    • At 17.68 @ 6:45 AM; up from the last close; at/below 5-day SMA;
    • Recent high =  23.55 on March 25; low =  15.38 on April 14
    • Sentiment: Risk-Neutral-to-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 23 was a Dragonfly Doji at all-time highs;
    • Stochastic (9,1, 3): %K is just below %D; near 100
    • RSI (9) is above 75
  • The week was down -5.30 or -0.1%; the 5-week ATR is 92.79
  • A down week; first in the last five weeks, and fourth in the last ten weeks
  • The weekly week pivot point=4164.24, R1=4210.10, R2=4240.03; S1=4134.31, S2=4088.45; S1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A small candle completely within the upper shadow of the previous day
    • 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 above %D
    • RSI-9 is turning up; just below 70; below 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 up since 10:00 AM on April 15; Uptrend since 10:00 AM on March 25;
    • 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 drifting down from near 75 at 12:00 AM to just below 60
  • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving Sideways since 9:30 AM on Monday between 4173.00 and 4186.00 with a brief breach up
    • RSI-21 drifting sideways to down above 50 with a Bearish Divergence at 1:30 AM
    • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways since 11:30 AM on Monday
  • The Bollinger Band is relatively stable and narrow
    • Stochastic (9, 1, 3): %K is above %D
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mostly higher on Monday, April 26 in mostly lower volume.  Dow Jones Industrial Average was down. Dow Jones Transportation Average was down too in higher volume. Day’s price range was small.

From Briefing.com:

The S&P 500 (+0.2%) eked out an intraday record high on Monday, as investors appeared cautiously optimistic for this week’s big slate of events. The Nasdaq Composite (+0.9%) and Russell 2000 (+1.2%) outperformed, with the Nasdaq closing at a record high, while the Dow Jones Industrial Average decreased 0.2%.

Advancing issues had a clear advantage over declining issues at the NYSE and Nasdaq, but the gains were relatively modest at the large-cap level as no sector in the S&P 500 advanced more than 1.0%. The biggest gains were scored in the small-cap, micro-cap, and cryptocurrency spheres, signaling enhanced retail sentiment.

Within the S&P 500, the consumer discretionary (+0.6%), information technology (+0.6%), and energy (+0.6%) sectors were the top performers. The consumer staples (-1.2%), utilities (-0.6%), health care (-0.4%), and industrials (-0.3%) sectors lagged in negative territory.

[…]

In the Treasury market, the 10-yr yield settled unchanged at 1.57% after touching 1.60% in the morning.

[…]

The 2-yr yield increased two basis points to 0.17%. The U.S. Dollar Index was little changed at 90.82. WTI crude futures increased 0.3%, or $0.19, to $61.96/bbl.

[…]
  • Total durable goods orders rose 0.5% month-over-month in March (Briefing.com consensus 2.0%) following an upwardly revised 0.9% decline (from -1.1%) in February. Orders, excluding transportation, jumped 1.6%, in-line with the Briefing.com consensus estimate, after declining an upwardly revised 0.3% (from -0.9%) in February.
[…]
  • Russell 2000 +16.4% YTD
  • S&P 500 +11.5% YTD
  • Dow Jones Industrial Average +11.0% YTD
  • Nasdaq Composite +9.7% YTD

Overseas: 

  • Europe: DAX +0.1%, FTSE +0.4, CAC +0.3%
  • Asia: Nikkei +0.4%, Hang Seng -0.4%, Shanghai +1.0%

Commodities: 

  • Crude Oil -0.25 @ 61.89
  • Nat Gas +0.15 @ 2.88
  • Gold +2.00 @ 1779.60
  • Silver +0.15 @ 26.24
  • Copper +0.10 @ 4.44
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