Market Remarks

Morning Notes – Monday June 7, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are little changed near all-time highs
  • The odds are for an up to a sideways day – watch for a break below 4214.00
  • No key economic data report due during the day:

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4219.34, 4206.05, and 4192.15
  • Critical resistance levels for S&P 500 are 4233.45, 4240.21, and 4250.53
  • Key levels for E-mini futures: break above 4232.50, the high of 6:00 PM on Sunday and break below 4214.00, the low of 3:00 AM

Pre-Open

  • On Friday at 4:00 PM, S&P futures (June 2021) closed at 4228.25 and the index closed at 4229.89 – a spread of about -1.75 points; futures closed at 4228.25 for the day; the fair value is +0.0
  • Pre-NYSE session open, futures are mixed – at 8:00 AM, S&P 500 futures were down by -0.50; Dow up by +47, and NASDAQ down by -18.25

Markets Around The World

  • Markets in the East closed mostly higher – Hong Kong and Sydney were down;
  • European markets are higher
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • AUD/USD
    • USD/CAD
    • INR/USD
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • NZD/USD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are lower
    • Industrial metals are mostly lower
    • Most soft commodities are mostly higher
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.560%, down -7.2 basis points from two weeks ago;
    • 30-years is at 2.239%, down -9.4 basis points;
    • 2-years yield is at 0.153%, unchanged;
    • The 10-Year-&-2-Year spread is at 1.407, down from 1.479
  • VIX
    • At 16.90 @ 7:45 AM; down from the last close; below 5-day SMA;
    • Recent high =  25.96 on May 19; low =  15.90 on May 28
    • Sentiment: Risk-Neutral

The trend and patterns on various time frames for S&P 500:

Monthly
  • Confirmed Uptrend
  • May 2021 was a Doji with a small upper shadow and a long lower shadow; at all-time closing and intra-month highs;
    • Stochastic %K above %D near 100;
    • RSI-9 near 80; 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
Weekly:
  • The week ending on May 28 was a small candle similar to a Doji  at all-time highs with a small upper shadow and a long lower shadow
    • Stochastic (9,1, 3): %K is above %D;
    • RSI (9) is just above 70
  • The week was up +25.78 or +0.6%; the 5-week ATR is 108.99
  • An up week; third in the last five weeks, and seventh in the last ten weeks
  • The weekly week pivot point=4210.65, R1=4253.36, R2=4276.84; S1=4187.17, S2=4144.46; R1 & S1 pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A green candle with almost no upper and lower shadows near all-time highs;
    • %K is above %D above 90
    • RSI-9 is above 60; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend Under Pressure – moving sideways
2-Hour (E-mini futures)
  • Breaking above a sideways move since 12:00 PM on May 24
    • RSI-21 is above 65 after declining from above 75 to below 60
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Breaking above a down-sloping flag – the 61.8% extension target is near 4244.00 and the 100% extension target is near 4263.00
    • RSI-21 is just above 60
    • Above EMA10 of EMA50, which is above EMA20
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways to up since 1:15 AM
  • The Bollinger Band is expanding since 6:30 AM with price walking up the upper band
    • Stochastic (9, 1, 3): %K is crisscrossing %D above 80
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mostly higher on Friday, June 4 in mostly lower volume. Dow Jones Transportation Average closed down and NASDAQ Composite traded in lower volume. NYSE Composite and Wilshire 5000 Total Market Index closed at all-time highs.

For the week, major US indices mostly closed higher in lower volume. Dow Jones Transportation Average closed lower. Markets in Asia were mixed but Europe was mostly up. The dollar index was up, energy futures were down, precious metals were down, industrial metals were mixed and the soft commodities were mostly higher. The US Treasury yields closed down for the week.

From Briefing.com:

The stock market finished the week on a strong note as the Nasdaq (+1.5%) paced a daylong rally while the S&P 500 (+0.9%) and Dow (+0.5%) followed. The Dow and S&P 500 gained a respective 0.7% and 0.6% for the week while the Nasdaq advanced 0.5%. […]

Sectors that underperformed yesterday were at the forefront of today’s rally with technology (+1.9%; +1.2% for the week) and communication services (+1.4%; +0.6% for the week) turning positive for the week while the consumer discretionary sector (+0.8%; -1.0% for the week) ended among today’s leaders, but still finished the week behind most of the remaining groups.

[…]

Treasuries finished the day on their highs with the 10-yr yield falling seven basis points to 1.56%. The benchmark yield slipped two basis points for the week, stopping just above last week’s low.

[…]
  • May nonfarm payrolls increased by 559,000 (Briefing.com consensus 720,000). The 3-month average for total nonfarm payrolls increased to 541,000 from 533,000 in April.
  • […]
  • Factory orders for manufactured goods decreased 0.6% m/m in April (Briefing.com consensus 0.5%) after increasing an upwardly revised 1.4% (from 1.1%) in March. Shipments of manufactured goods were up 0.4% after increasing 2.1% in March.
[…]
  • Russell 2000 +15.8% YTD
  • Dow Jones Industrial Average +13.6% YTD
  • S&P 500 +12.6% YTD
  • Nasdaq Composite +7.2% YTD
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