Market Remarks

Morning Notes – Friday May 7, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher
  • The odds are for an up day with elevated volatility – watch for a break below 4191.75 for a change of fortunes
    • The Employment report will have a significant impact on price-action
  • Key economic data report due during the day:
    • Non-Fram Employment Change ( 990K est.; prev. 916K) at 8:30 AM
    • Average Hourly Earnings ( 0.0% est.; prev. -0.1%) at 8:30 AM
    • Unemployment CLaims ( 5.8% est.; prev. 6.0% ) at 8:30 AM
    • Final Wholesale Inventories ( 1.4% est.; prev. 1.4%) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4180.65, 4167.75, and 4147.33
  • Critical resistance levels for S&P 500 are 4209.39, 4128.78, and 4239.25
  • Key levels for E-mini futures: break above 4206.75, the high of 6:15 AM and break below 4191.75, the low of 3:00 AM

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (June 2021) closed at 4194.50 and the index closed at 4201.62 – a spread of about -6.25 points; futures closed at 4194.25 for the day; the fair value is +0.25
  • Pre-NYSE session open, futures are higher- at 8:00 AM, S&P 500 futures were up by +8.00; Dow by +116, and NASDAQ by +34.00

Markets Around The World

  • Markets in the East closed mostly higher – Shanghai and Hing Kong were down
  • European markets are higher
  • 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 higher
    • Industrial metals are higher
    • Most soft commodities are mostly higher
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.561%, up +0.7 basis points from two weeks ago;
    • 30-years is at 2.236%, down -0.3 basis points;
    • 2-years yield is at 0.161%, up +1.6 basis points;
    • The 10-Year-&-2-Year spread is at 1.400, down from 1.409
  • VIX
    • At 18.25 @ 6:45 AM; down from the last close; below 5-day SMA;
    • Recent high =  19.90 on April 22; low =  16.67 on April 28
    • Sentiment: Risk-On-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 30 was a small Gravestone Doji at all-time highs;
    • Stochastic (9,1, 3): %K is below %D;
    • RSI (9) is above 75
  • The week was up +1.00 or +0.0%; the 5-week ATR is 76.64
  • An up week; fourth in the last five weeks, and seventh in the last ten weeks
  • The weekly week pivot point=4191.60, R1=4208.35, R2=4235.53; S1=4164.42, S2=4147.67; R1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A relatively large green candle with almost no upper shadow and small lower shadow
    • %K is below %D near 40
    • RSI-9 is below 55; below 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Moving up since 10:00 AM on Thursday; broke above a downtrend line; 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 moving just below 70
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side-Up
30-Minute (E-mini futures)
  • Broke above a down-sloping flag at 3:00 PM on Thursday;
    • An ABCD pattern since 11:30 AM; 100% extension target is near 4200.00 and 161.8% extension target is near 4235.00;
    • RSI-21 is moving around 65
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways since 9:15 PM
  • The Bollinger Band is expanding since 5:45 AM
    • Stochastic (9, 1, 3): %K is below %D since 7:00 AM
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Thursday, May 6 in higher volume. Dow Jones Industrial Average and NYSE Composite made all-time closing and intraday highs. Dow Jones Transportation Average made the all-time closing high.

From Briefing.com:

The S&P 500 advanced 0.8% on Thursday in a comeback session, as investors gravitated toward the blue-chip stocks and bought the dip in technology. The Dow Jones Industrial Average (+0.9%) set intraday and closing record highs, while the Nasdaq Composite (+0.4%) snapped a four-session losing streak with a more modest gain. The Russell 2000 finished flat. […]

The information technology sector (+1.0%) benefited from a buy-the-dip mindset after being down 0.8% intraday, and 3.0% for the week, but the gains were relatively broad-based. The financials sector (+1.4%) finished atop the standings, while the health care sector (+0.1%) was interestingly the laggard with a slim gain.

[…]

The 2-yr yield was unchanged at 0.15%. The U.S. Dollar Index decreased 0.4% to 90.90. WTI crude futures decreased 1.4%, or $0.94, to $64.69/bbl.

[…]
  • Initial jobless claims for the week ending May 1 declined by 92,000 to 498,000 (Briefing.com consensus 530,000), which is the lowest level since March 14, 2020. Continuing claims for the week ending April 24 increased by 37,000 to 3.690 million.
  • […]
  • Nonfarm business sector labor productivity increased at a 5.4% annual rate in the first quarter (Briefing.com consensus 5.0%) while unit labor costs decreased at an annual rate of 0.3% (Briefing.com consensus -1.6%).
[…]
  • Russell 2000 +13.5% YTD
  • Dow Jones Industrial Average +12.9% YTD
  • S&P 500 +11.9% YTD
  • Nasdaq Composite +5.8% YTD

Overseas: 

  • Europe: DAX +0.2%, FTSE +0.5%, CAC +0.3%
  • Asia: Nikkei +1.8%, Hang Seng +0.5%, Shanghai -0.2%

Commodities: 

  • Crude Oil -0.86 @ 64.71
  • Nat Gas -0.01 @ 2.93
  • Gold +30.00 @ 1815.00
  • Silver -0.91 @ 27.46
  • Copper +0.08 @ 4.60
Exit mobile version