Market Remarks

Morning Notes – Thursday April 29, 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  a sideways to down move from pre-open levels around 4205.00 day – watch for a break below 4198.00 for clarity
  • Key economic data report due during the day:
    • Unemployment Claims ( 553K vs. 545K est.; prev. 547K) at 8:30 AM
    • Advance GPD ( 6.4% vs. 6.8% est.; prev. 4.3%) at 8:30 AM
    • Advance GDP Price Index ( 4.1% vs. 2.6% est.; prev. 2.0%) at 8:30 AM
    • Pending Homes Sales ( 4.2% est.; prev. -10.6% ) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4201.53, 4181.78, and 4176.22
  • Critical resistance levels for S&P 500 are 4208.58, 4215.63, and 4240.03
  • Key levels for E-mini futures: break above 4207.75, the high of 6:30 AM and break below 4198.00, the low of 1:30 AM

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (June 2021) closed at 4178.00 and the index closed at 4183.18 – a spread of about -5.25 points; futures closed at 4176.25 for the day; the fair value is +1.75
  • Pre-NYSE session open, futures are higher – at 8:15 AM, S&P 500 futures were up by +29.50; Dow by +145, and NASDAQ by +147.50

Markets Around The World

  • Markets in the East closed mostly higher – Seoul was down; Tokyo was closed
  • European markets are mostly higher – Germany and Switzerland are lower
  • Currencies (from two weeks ago):
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • Dollar index
    • USD/CHF
    • USD/CAD
    • INR/USD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are lower
    • Industrial metals are mixed
    • Most soft commodities are mostly higher
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.620%, down -1.8 basis points from two weeks ago;
    • 30-years is at 2.300%, down -2.5 basis points;
    • 2-years yield is at 0.145%, up +0.7 basis points;
    • The 10-Year-&-2-Year spread is at 1.456, down from 1.481
  • VIX
    • At 16.95 @ 7:45 AM; down from the last close; below 5-day SMA;
    • Recent high =  19.90 on April 22; 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 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 almost no lower shadow and small upper shadows like a small Gravestone Doji
    • 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 below %D above 80
    • RSI-9 is around 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 above 70
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side-Up
30-Minute (E-mini futures)
  • Breaking up after moving sideways for few days;
    • RSI-21 moving along above 60
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways to up since 12:30 AM
  • The Bollinger Band is slightly expanding since 4:00 AM with price walking up the upper band
    • Stochastic (9, 1, 3): %K is above %D since 8:00 AM
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mostly lower on Wednesday, April 28 in mixed volume. Russell 2000 and NYSE Composite closed higher. Dow Jones Industrial Average and NASDAQ Composite traded in higher volume. Most major indices continue to make small indecisive candlestick formations and the day’s price range remains small.

From Briefing.com:

The S&P 500 decreased 0.1% on Wednesday in another tight-ranged session, as the broader market showed little reaction to the Fed’s policy decision or earnings news. The Nasdaq Composite (-0.3%) and Dow Jones Industrial Average (-0.5%) also closed lower, while the Russell 2000 (+0.1%) closed slightly higher. […]

The communication services (+1.2%) and energy (+3.4%) sectors saw notable strength today,

[…]

Conversely, the information technology sector (-1.0%) was the weakest link with a 1% decline,

[…]

U.S. Treasury yields declined from session highs, settling little changed, following the release of the FOMC statement and Fed Chair Powell’s affirmation of the Fed’s view that inflation will be transitory. The 10-yr yield was unchanged at 1.62%, and the 2-yr yield was unchanged at 0.17%. The U.S. Dollar Index decreased 0.4% to 90.58.

[…]
  • The Advance report for International Trade in Goods for March showed a deficit of $90.6 billion versus $86.7 billion in February. The Advance report for Retail Inventories for March decreased 1.4%, while the Advance report for Wholesale Inventories for March increased 1.4%.
  • The MBA Mortgage Applications Index decreased 2.5% following an 8.6% increase in the prior week.
[…]
  • Russell 2000 +16.7% YTD
  • S&P 500 +11.4% YTD
  • Dow Jones Industrial Average +10.5% YTD
  • Nasdaq Composite +9.0% YTD

Overseas: 

  • Europe: DAX +0.3%, FTSE +0.3%, CAC +0.5%
  • Asia: Nikkei +0.2%, Hang Seng +0.4%, Shanghai +0.4%

Commodities: 

  • Crude Oil +0.80 @ 63.79
  • Nat Gas +0.02 @ 2.96
  • Gold -4.90 @ 1773.30
  • Silver -0.38 @ 26.02
  • Copper -0.01 @ 4.48
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