Market Remarks

Morning Notes – Wednesday April 28, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are unchanged
  • The odds are for a sideways day – watch for a break above 4186.00  and a break below 4175.75 for clarity
  • Key economic data report due during the day:
    • Good Trade Balance ( -90.6B vs. -88.2B est.; prev. -87.1B) at 8:30 AM
    • Prelim Wholesale Inventories ( 1.4% vs. 0.5% est.; prev. 0.6%) at 8:30 AM
    • FOMC Statement at 2:00 PM
    • Fed Funds Rate ( <0.25% est.; prev. <0.25% ) at 2:00 PM
    • FOMC Press Conference at 2:30 PM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4176.22, 4168.34, and 4153.26
  • Critical resistance levels for S&P 500 are 4193.25, 4202.56, and 4211.77
  • Key levels for E-mini futures: break above 4185.75, the high of 3:00 AM and break below 4175.75, the low of 7:45 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (June 2021) closed at 4178.00 and the index closed at 4186.72 – a spread of about -8.75 points; futures closed at 4179.00 for the day; the fair value is -1.00
  • Pre-NYSE session open, futures are mixed – at 8:45 AM, S&P 500 futures were up by +0.50; Dow down by -71, and NASDAQ down by -24.00

Markets Around The World

  • Markets in the East closed mostly higher – Seoul was down
  • European markets are mostly higher – Italy is lower
  • Currencies (from two weeks ago):
    Up Down
    • EUR/USD
    • AUD/USD
    • NZD/USD
    • INR/USD
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • USD/CAD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are higher
    • Industrial metals are higher
    • Most soft commodities are mostly higher
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.632%, up +0.9 basis points from two weeks ago;
    • 30-years is at 2.300%, down -0.7 basis points;
    • 2-years yield is at 0.176%, up +1.9 basis points;
    • The 10-Year-&-2-Year spread is at 1.456, down from 1.466
  • VIX
    • At 17.39 @ 6:45 AM; down from the last close; above 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 indecisive candle with small shadows
    • Broke above a symmetrical triangle at 3550.00 level on November 9; the 161.8% extension target near 4140.00 levels is achieved
    • %K has crossed above %D from below 30
    • RSI-9 is turning up; just above 65; 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 is below 50
  • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving Sideways since 12:30 PM on April 23;
    • RSI-21 moving along below 50
    • At/below EMA10 of EMA50, which is below EMA20
  • Bias: Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways to down since 3:00 PM on April 23
  • The Bollinger Band is relatively stable and narrow
    • Stochastic (9, 1, 3): %K is above %D
  • Bias: Side

Previous Session

Major U.S. indices closed mixed on Tuesday, April 27 in mixed volume. S&P 500, NASDAQ Composite, and Wilshire 5000 Total Market Index closed lower. S&P 500 and Dow Jones Transportation Average traded in lower volume. Most major indices made small indecisive candlestick formations. Day’s price action was small.

From Briefing.com:

The stock market closed little changed on Tuesday, as investors assumed a wait-and-see mindset for the Fed’s policy announcement tomorrow. The S&P 500 (-0.02%), Dow Jones Industrial Average (+0.01%), Nasdaq Composite (-0.3%), and Russell 2000 (+0.1%) finished within 0.3% of their flat lines.

There was a cyclical tilt to the session, evident by the outperformances of the S&P 500 industrials (+0.9%), financials (+0.9%), and energy (+1.3%) sectors.

[…]

Conversely, the information technology (-0.3%), communication services (-0.5%), health care (-0.5%), and utilities (-0.8%) sectors were among the laggards in negative territory. No sector declined more than 1.0%, though.

[…]

The 10-yr yield increased five basis points to 1.62%, while the 2-yr yield was unchanged at 0.17%. The U.S. Dollar Index increased 0.1% to 90.89.

[…]
  • The Conference Board’s Consumer Confidence Index jumped to 121.7 in April (Briefing.com consensus 113.5) from a downwardly revised 109.0 (from 109.7) in March. The April reading is the highest since February 2020.
  • […]
  • The S&P Case-Shiller Home Price Index increased 11.9% yr/yr in February (Briefing.com consensus 11.8%) following an upwardly revised 12.1% increase in January (from 11.1%).
  • The FHFA Housing Price Index increased 0.9% m/m in February.
[…]
  • Russell 2000 +16.5% YTD
  • S&P 500 +11.5% YTD
  • Dow Jones Industrial Average +11.0% YTD
  • Nasdaq Composite +9.3% YTD

Overseas: 

  • Europe: DAX -0.3%, FTSE -0.3%, CAC flat
  • Asia: Nikkei -0.5%, Hang Seng -0.2%, Shanghai flat

Commodities: 

  • Crude Oil +1.10 @ 62.99
  • Nat Gas +0.06 @ 2.94
  • Gold -1.40 @ 1778.20
  • Silver +0.16 @ 26.40
  • Copper +0.05 @ 4.49
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