Market Remarks

Morning Notes – Monday June 14, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are a bit higher; moving sideways since 6:00 PM on Sunday
  • The odds are for a sideways to an up day – watch for a break below 4232.25
  • No key economic data report due during the day:

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4238.86, 4232.25, and 4220.34;
  • Critical resistance levels for S&P 500 are 4249.74, 4253.13, and 4258.82
  • Key levels for E-mini futures: break above 4247.50, the high of 3:15 AM and break below 4235.75, the low of 7:45 AM

Pre-Open

  • On Friday at 4:00 PM, S&P futures (September 2021) closed at 4236.50 and the index closed at 4247.44 – a spread of about -11.00 points; futures closed at 4236.50 for the day; the fair value is +0.0
  • Pre-NYSE session open, futures are mixed – at 8:15 AM, S&P 500 futures were up by +2.75; Dow down by -16, and NASDAQ up by +38.25

Markets Around The World

  • Markets in the East closed mostly higher – Sydney, Mumbai, and Seoul closed higher; Singapore closed lower; Shanghai, Hong Kong, and Tokyo were closed;
  • European markets are mostly higher – Italy is lower
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • USD/CAD
    • INR/USD
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are mixed
    • Industrial metals are lower
    • Most soft commodities are mixed
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.462%, down -11.9 basis points from two weeks ago;
    • 30-years is at 2.152%, down -11.1 basis points;
    • 2-years yield is at 0.149%, up +0.8 basis points;
    • The 10-Year-&-2-Year spread is at 1.313, down from 1.440
  • VIX
    • At 15.91 @ 6:45 AM; up from the last close; below 5-day SMA;
    • Recent high =  25.96 on May 19; low =  15.15 on June 8
    • 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 June 11 was a small green candle at all-time highs with almost no upper shadow and a small lower shadow
    • Stochastic (9,1, 3): %K is above %D;
    • RSI (9) is just above 70
  • The week was up +17.55 or +0.4%; the 5-week ATR is 95.37
  • An up week; third in the last five weeks, and seventh in the last ten weeks
  • The weekly week pivot point=4235.20, R1=4261.98, R2=4276.53; S1=4220.65, S2=4193.87; No pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A small green candle at all-times highs; moving sideways to up for the past few days
    • %K is above %D above 90
    • RSI-9 is near 70; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Drifting higher; Moving sideways to up since 2:00 PM on June 4 after breaking above a sideways move from 12:00 PM on May 24
    • RSI-21 declined to just above 55 after making Bearish Divergence
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side-Up
30-Minute (E-mini futures)
  • Moving sideways to down since 6:00 PM on Sunday;
    • RSI-21 is drifting lower since 10:30 PM; just above 50
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways since 10:15 PM
  • The Bollinger Band is relatively stable with price drifting to the lower bound
    • Stochastic (9, 1, 3): %K is crisscrossing %D lower
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Friday, June 11 in lower volume. Major indices drifted lower in the morning session and then turned around in the afternoon and closed near the highs. The major indices are near all-time highs.

For the week, major US indices were mixed. S&P 500, NASDAQ Composite, Russell 2000, and Wilshire 5000 Total Market Index closed up. Most Asian markets were up and the European exchanges were up. The dollar index was up, energy futures and precious metals were up, industrial metals were down and most soft commodities were down too.

From Briefing.com:

The S&P 500 (+0.2%), Nasdaq Composite (+0.4%), and Dow Jones Industrial Average (+0.04%) closed slightly higher on Friday, with the S&P 500 setting another closing record high. The Russell 2000 (+1.1%) and iShares Micro-Cap ETF (IWC 154.77, +1.46, +1.0%) outperformed, as investors broadened out their risk exposure. […]

The information technology (+0.6%) and financials (+0.6%) sectors showed relative strength, while the health care sector (-0.7%) underperformed.

Interestingly, the 10-yr yield fell to a three-month low at 1.43% overnight before settling at 1.46%, or unchanged from yesterday’s settlement. The CBOE Volatility Index (VIX 15.65, -0.45, -2.8%) closed at its lowest since February 2020, representing a pre-pandemic reset of the hedging premium.

[…]

Separately, consumer sentiment improved modestly following a drop-off in May, according to the preliminary June reading for the University of Michigan Index of Consumer Sentiment. The index checked in at 86.4 (Briefing.com consensus 83.5), versus 82.8 in May. Consumers, however, remained concerned about rising prices for houses and vehicles.

[…]

The 2-yr yield was unchanged at 0.15%. The U.S. Dollar Index rose 0.5% to 90.51. WTI crude futures rose 1.0%, or $0.70, to $71.00/bbl.

[…]
  • Russell 2000 +18.3% YTD
  • S&P 500 +13.1% YTD
  • Dow Jones Industrial Average +12.7% YTD
  • Nasdaq Composite +9.2% YTD
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