Market Remarks

Morning Notes – Tuesday June 8, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher near the upper bound of a Horizontal Channel between 4235.00 and 4212.00
  • The odds are for an up to a sideways day – watch for a break below 4212.00
  • Key economic data report due during the day:
    • Trade Balance ( -68.5B est.; prev. -74.4B) at 8:30 AM
    • JOLTS Jobs Opening ( 8.18M est.; prev. 8.12M) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4222.56, 4215.66, and 4206.05
  • Critical resistance levels for S&P 500 are 4233.45, 4241.52, and 4250.70
  • Key levels for E-mini futures: break above 4234.75, the high of 9:15 PM on Monday and break below 4212.25, the low of 6:15 AM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (June 2021) closed at 4225.25 and the index closed at 4226.52 – a spread of about -1.25 points; futures closed at 4225.50 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures are mixed – at 8:00 AM, S&P 500 futures were up by +7.00; Dow down by -12, and NASDAQ up by +72.50

Markets Around The World

  • Markets in the East closed mostly lower – Sydney was up;
  • European markets are mostly higher – Spain and Italy are lower
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • USD/CAD
    • INR/USD
    • EUR/USD
    • NZD/USD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are higher
    • Industrial metals are mostly higher
    • Most soft commodities are mostly higher
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.569%, down -3.9 basis points from two weeks ago;
    • 30-years is at 2.251%, down -5.1 basis points;
    • 2-years yield is at 0.161%, up +1.2 basis points;
    • The 10-Year-&-2-Year spread is at 1.408, down from 1.459
  • VIX
    • At 16.44 @ 7:45 AM; up 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 Doji like candle  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 small Doji candle with almost no upper shadow and small lower shadow;
    • %K is above %D near 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)
  • Moving sideways since 12:00 PM on May 24
    • RSI-21 is above 62; Bearish Divergence at 8:00 PM
    • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Side
30-Minute (E-mini futures)
  • Moving within a Horizontal Channel between 4235.00 and 4212.00; near the upper bound
    • RSI-21 is just around 55; trending below a downtrend line from June 4
    • Above EMA10 of EMA50, which is above EMA20
  • Bias: Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways since 9:00 PM
  • The Bollinger Band is expanding since 5:30 AM with price first breaching the lower band and then bouncing up to the upper band
    • Stochastic (9, 1, 3): %K is crisscrossing %D above 80
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mixed on Monday, June 7 in mostly lower volume. NASDAQ Composite, Russell 2000, and Wilshire 5000 Total Market Index closed higher and Russell 2000 traded in higher volume. The day’s price range was small and essentially sideways.

From Briefing.com:

The stock market began the first full week of June on a quiet note. The S&P 500 (-0.1%) finished the day with a slight loss while the Dow (-0.4%) lagged and the Nasdaq (+0.5%) displayed relative strength. […]

Seven sectors finished the day in negative territory, but the materials sector (-1.2%) was the only group that lost more than 0.7%. Industrials (-0.7%) and financials (-0.6%) weighed on the broader market throughout the day while technology (unch) climbed off its low in the afternoon. Energy (-0.4%) pulled back after jumping nearly 7.0% last week.

[…]

On the upside, real estate (+0.9%) held the lead throughout the day while communication services (+0.5%) and health care (+0.3%) also spent the day in positive territory.

[…]

Treasuries finished with slim losses that lifted the 10-yr yield by a basis point to 1.57%.

[…]
  • Russell 2000 +17.4% YTD
  • Dow Jones Industrial Average +13.2% YTD
  • S&P 500 +12.5% YTD
  • Nasdaq Composite +7.7% YTD

Overseas: 

  • Europe: DAX -0.1%, FTSE +0.1%, CAC +0.4%
  • Asia: Nikkei +0.3%, Hang Seng -0.3%, Shanghai +0.2%

Commodities: 

  • Crude Oil -0.23 @ 69.25
  • Nat Gas -0.03 @ 3.07
  • Gold +7.20 @ 1898.80
  • Silver +0.13 @ 28.00
  • Copper -0.01 @ 4.52
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