Market Remarks

Morning Notes – Wedesday June 9, 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 4224.00
  • Key economic data report due during the day:
    • Final Wholesale Inventories ( 0.8% est.; prev. 0.8%) at 8:30 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4225.87, 4215.66, and 4208.41
  • Critical resistance levels for S&P 500 are 4236.92, 4239.86, and 4252.47
  • Key levels for E-mini futures: break above 4233.00, the high of 8:00 AM and break below 4224.00, the low of 7:30 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (June 2021) closed at 4225.50 and the index closed at 4227.26 – a spread of about -1.75 points; futures closed at 4225.75 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 +5.75; Dow down by -12, and NASDAQ up by +39.50

Markets Around The World

  • Markets in the East closed mostly lower – Shanghai was up;
  • European markets are mostly lower – Spain and Switzerland are higher
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • INR/USD
    • EUR/USD
    • AUD/USD
    • NZD/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 1.528%, down -3.6 basis points from two weeks ago;
    • 30-years is at 2.209%, down -5.1 basis points;
    • 2-years yield is at 0.157%, up +0.8 basis points;
    • The 10-Year-&-2-Year spread is at 1.371, down from 1.415
  • VIX
    • At 17.23 @ 7:45 AM; up from the last close; above 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 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 candle; moving sideways for the past few days
    • %K crossing below %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 2:00 PM on June 4 after breaking above a sideways move from 12:00 PM on May 24
    • RSI-21 is just below 60 after a Bearish Divergence at 8:00 AM on June 8
    • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Side
30-Minute (E-mini futures)
  • Near the upper band of a Horizontal Channel between 4235.00 and 4212.00 after moving around the middle for some time;
    • RSI-21 is moving around 50 since 11:30 AM on Tuesday
    • At/above EMA10 of EMA50, which is at/above EMA20
  • Bias: Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways since 9:45 PM
  • The Bollinger Band is stable and narrow
    • Stochastic (9, 1, 3): %K is above %D above 80
  • Bias: Side

Previous Session

Major U.S. indices closed mostly higher on Tuesday, June 8 in mixed volume. Dow Jones Industrial Average closed lower. S&P 500 and NASDAQ Composite traded in lower volume. The day’s price range was small and the move was mostly sideways.

From Briefing.com:

The S&P 500 closed relatively unchanged on Tuesday after flirting with all-time highs during the session. The Nasdaq Composite (+0.3%) and Dow Jones Industrial Average (-0.1%) closed mixed and little changed, while the Russell 2000 (+1.1%) and iShares Micro-Cap ETF (IWC 157.30, +1.75, +1.1) each gained 1.1%. […]

Amazon lifted the S&P 500 consumer discretionary sector (+1.0%) to the top of the sector leaderboard, and the energy sector (+0.9%) followed closely behind as WTI crude futures ($70.08/bbl, +0.83, +1.2%) settled above $70 per barrel. The utilities (-0.9%), consumer staples (-0.9%), and health care (-0.4%) sectors underperformed.

[…]

In the Treasury market, the 10-yr yield flirted with the low-end of its three-month consolidation range. The benchmark yield settled lower by four basis points at 1.53% after touching 1.51% following the release of the April Trade Balance report, which showed the U.S. trade deficit narrow to $68.9 billion (Briefing.com consensus -$68.6 billion) from $75.0 billion in March.

The 2-yr yield decreased two basis points to 0.14%. The U.S. Dollar Index increased 0.2% to 90.11.

[…]
  • The trade deficit in April narrowed to $68.9 billion (Briefing.com consensus -$68.6 billion) from a downwardly revised $75.0 billion (from -$74.4 billion) in March. April exports were $2.3 billion more than March exports while April imports were $3.8 billion less than March imports.
  • […]
  • Job openings increased to a record 9.286 million in April from a revised 8.288 million in March (from 8.123 million), according to the JOLTS report.
  • The NFIB Small Business Optimism Index for May decreased to 99.6 from 99.8 in April.
[…]
  • Russell 2000 +18.7% YTD
  • Dow Jones Industrial Average +13.1% YTD
  • S&P 500 +12.5% YTD
  • Nasdaq Composite +8.0% YTD

Overseas: 

  • Europe: DAX -0.2%, FTSE +0.3%, CAC +0.1%
  • Asia: Nikkei -0.2%, Hang Seng -0.1%, Shanghai -0.5%

Commodities: 

  • Crude Oil +0.93 @ 70.18
  • Nat Gas +0.06 @ 3.13
  • Gold -3.80 @ 1895.00
  • Silver -0.31 @ 27.71
  • Copper +0.03 @ 4.55
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