Market Remarks

Morning Notes – Wednesday June 30, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are a bit lower;
  • The odds are for a down to sideways day – watch for a break above 4283.75 for a change of fortunes
  • Key economic data report due during the day:
    • ADP Non-Farm Employment Change ( 692K vs. 555K est.; prev. 978K) at 8:15 AM
    • Chicago PMI ( 70.2 est.; prev. 75.2) at 9:45 AM
    • Pending Home Sales ( -1.1% est.; prev. -4.4%) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4287.04,  4274.67, and 4266.27
  • Critical resistance levels for S&P 500 are 4295.95, 4300.52, and 4306.60
  • Key levels for E-mini futures: break above 4283.75, the high of 7:15 AM and break below 4269.25, the low of 5:15 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (September 2021) closed at 4282.50 and the index closed at 4291.80 – a spread of about -9.25 points; futures closed at 4282.00 for the day; the fair value is -0.50
  • Pre-NYSE session open, futures are little changed – at 8:30 AM, S&P 500 futures were down by -1.25; Dow down by -2, and NASDAQ up by +3.00

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Sydney, Seoul, and Singapore closed up; Hong Kong, Tokyo, and Mumbai closed down
  • European markets are lower
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • INR/USD
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are lower
    • Industrial metals are lower
    • Most soft commodities are mixed
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.480%, down -1.9 basis points from two weeks ago;
    • 30-years is at 2.096%, down -10.3 basis points;
    • 2-years yield is at 0.263%, up +10.2 basis points;
    • The 10-Year-&-2-Year spread is at 1.217, down from 1.338
  • VIX
    • At 16.62 @ 8:00 AM; up from the last close; above 5-day SMA;
    • Recent high =  21.82 on June 21; low =  14.10 on June 29
    • Sentiment: Risk-On

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 25 was a Bullish Engulfing candle at all-time highs with almost no lower and  upper shadows
    • Stochastic (9,1, 3): %K crossed above %D;
    • RSI (9) is just below 70
  • The week was up +114.25 or +2.7%; the 5-week ATR is 76.49
  • An up week; fourth in the last five weeks, and sixth in the last ten weeks
  • The weekly week pivot point=4246.74, R1=4320.08, R2=4359.46; S1=4207.36, S2=4134.02; R1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A small Doji candle at all-time highs
    • %K crossed below %D; above 90
    • RSI-9 just above 65; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend Resumed
2-Hour (E-mini futures)
  • Moving up since 10:00 PM on June 20; moving sideways to down since 8:00 AM on June 29
    • RSI-21 declining since 8:00 AM on June 29 after making few Bearish Divergences
    • At/.below EMA20; which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
  • Moving sideways to down since 6:30 AM on June 29
    • RSI-21 trending down since 10:30 AM on June 29; around 45
    • At/below EMA20, which is below EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways to down since 10:30 PM on June 29
  • The Bollinger Band is expanding since 3:45 AM; price  first walked down the lower band and then bounced up to the middle band
    • Stochastic (9, 1, 3): %K is below since 7:00 AM
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mixed on Tuesday, June 29 in mostly lower volume. Russell 2000, NYSE Composite, and Wilshire 5000 Total Market Index closed lower. Dow Jones Industrial Average traded in higher volume. S&P 500 and NASDAQ Composite made all-time closing and intraday highs. Wilshire 5000 Total Market Index made an all-time intraday high.

From Briefing.com:

The S&P 500 (+0.03%) and Nasdaq Composite (+0.2%) eked out intraday and closing record highs on Tuesday, with the S&P 500 touching the 4300 level for the first time. The Dow Jones Industrial Average (+0.03%) closed fractionally higher like the S&P 500, while the Russell 2000 fell 0.6%. […]

Eight of the 11 S&P 500 sectors closed lower, led by utilities (-1.7%) as the only sector with a decline over 1.0%.

The financials (-0.3%) and energy (-0.5%) sectors were arguably bigger disappointments,

[…]

The 10-yr yield increased one basis point to 1.48%. Others would add that a CBOE Volatility Index (16.02, +0.26, +1.7%) well under 20.00 was supportive for overall risk sentiment.

The 2-yr yield increased one basis point to 0.26%. The U.S. Dollar Index increased 0.2% to 92.05. WTI crude futures increased 0.4%, or $0.26, to $73.08/bbl.

[…]
  • The Conference Board’s Consumer Confidence Index jumped to 127.3 in June (Briefing.com consensus 120.0) from an upwardly revised 120.0 (from 117.2) in May. June marked the highest level for the index since the first pandemic surge in March 2020.
  • […]
  • The FHFA Housing Price Index increased 1.8% m/m in April while the S&P Case-Shiller Home Price Index increased 14.9% yr/yr in April.
[…]
  • Russell 2000 +16.9% YTD
  • S&P 500 +14.3% YTD
  • Nasdaq Composite +12.7% YTD
  • Dow Jones Industrial Average +12.0% YTD

Overseas: 

  • Europe: DAX +0.9%, FTSE +0.2%, CAC +0.1%
  • Asia: Nikkei -0.8%, Hang Seng -1.1%, Shanghai -0.9%

Commodities: 

  • Crude Oil +0.26 @ 73.08
  • Nat Gas +0.04 @ 3.64
  • Gold -16.30 @ 1763.60
  • Silver -0.36 @ 25.85
  • Copper -0.02 @ 4.26
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