Market Remarks

Morning Notes – Tuesday August 10, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are little changed;
  • The odds are for a sideways day  — watch for a break  above 4432.00 and break below 4416.50 for clarity
  • Key economic data report due during the day:
    • Prelim Nonfarm Productivity ( 2.3% vs. 3.3% est.; prev. 4.3%) at 8:30 AM
    • Prelim Unit Costs (1.0% vs. 0.9% est.; prev. 1.7%) at 8:30 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4424.74, 4415.97, and 4400.23
  • Critical resistance levels for S&P 500 are 4440.82, 4446.81, and 4454.23
  • Key levels for E-mini futures: break above 4432.00, the high of 9:30 AM on Monday and break below 4416.50, the low of 10:00 PM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (September 2021) closed at 4425.50 and the index closed at 4432.35 – a spread of about -6.75 points; futures closed at 4425.75 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures are mixed – at 8:15 AM, S&P 500 futures were down by -0.25; Dow down by -13, and NASDAQ up by +16.75

Markets Around The World

  • Markets in the East closed mostly higher –  Seoul was lower;
  • European markets are mostly higher – the UK, and Spain are down;
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • GBP/USD
    • USD/CHF
    • USD/CAD
    • INR/USD
    • EUR/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
  • Commodities (from two weeks ago):
    • Energy futures are lower
    • Precious metals are lower
    • Industrial metals are lower
    • Most soft commodities are mostly higher
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.317%, up +4.1 basis points from two weeks ago;
    • 30-years is at 1.963%, up +3.7 basis points;
    • 2-years yield is at 0.224%, up +1.8 basis points;
    • The 10-Year-&-2-Year spread is at 1.093, down from 1.070
  • VIX
    • At 16.68 @ 7:45 AM; up from the last close; below 5-day SMA;
    • Recent high =  25.09 on July 19; low =  16.33 on July 23
    • Sentiment: Risk-Neutral-Off

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 August 6 was a relatively small green candle with almost no upper shadow and a small lower shadow at all-time highs;
    • Stochastic (9,1, 3): %K crossed above %D; just above 90
    • RSI (9) is above 70
  • The week was up +41.26 or +0.9%; the 5-week ATR is 92.14
  • An up week; third in the last five weeks, and seventh in the last ten weeks
  • The weekly pivot point=4416.78, R1=4460.56, R2=4484.60; S1=4392.74, S2=4348.96; R1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A small red candle with a small lower  shadow and a smaller upper shadows;
    • %K crossed below %D; above 90
    • RSI-9 is just above 60; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Moving along the upper bound of a Horizontal Channel that has been forming since July 23 between 4420.00 and 4380.00;
    • RSI-21 rising near 60 after falling to near 40 on Monday;
    • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Side-Up
30-Minute (E-mini futures)
  • Moving sideways since 7:30 AM on August 6;
    • RSI-21 rose to above 50 from near 40
    • At/above EMA20, which is at/above EMA10 of EMA50
  • Bias: Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is drifting up since 2:45 AM
  • The Bollinger Band is narrowing;
    • Stochastic (9, 1, 3): %K is crisscrossing %D higher
  • Bias: Side

Previous Session

Major U.S. indices closed mostly lower on Monday, August 9 in mostly lower volume.  NASDAQ Composite closed higher and Dow Jones Transportation Average traded in higher volume. Major indices declined in the first half-hour of trading and then mostly traded higher clawing back some of the loss.

From Briefing.com:

The S&P 500 decreased 0.1% on Monday in a mixed, and tight-ranged, session that lacked conviction. The Dow Jones Industrial Average (-0.3%) and Russell 2000 (-0.6%) joined the benchmark index in negative territory, while the Nasdaq Composite increased 0.2%. […]

Seven of the 11 S&P 500 sectors closed lower, although the energy sector (-1.5%) was the only sector that lost more than 1.0%.

[…]

The Treasury market, meanwhile, didn’t reflect increased growth concerns since the 10-yr yield settled three basis points higher at 1.32% after touching 1.27% intraday. The financials sector (+0.3%) benefited from the positive turnaround and was accompanied by the health care (+0.4%) and consumer staples (+0.3%) sectors atop the leaderboard.

[…]

The 2-yr yield was unchanged at 0.20%. The U.S. Dollar Index increased 0.2% to 92.98.

Monday’s economic data was limited to the JOLTS report for June, which showed job openings increase to a record-high of 10.073 million from a revised 9.483 million (from 9.209 million) in May.

[…]
  • S&P 500 +18.1% YTD
  • Nasdaq Composite +15.1% YTD
  • Dow Jones Industrial Average +15.0% YTD
  • Russell 2000 +13.2% YTD

Overseas: 

  • Europe: DAX -0.1%, FTSE +0.1%,CAC -0.1%
  • Asia: Nikkei closed for holiday, Hang Seng +0.4%, Shanghai +1.1%

Commodities: 

  • Crude Oil -1.52 @ 66.51
  • Nat Gas -0.09 @ 4.06
  • Gold -33.80 @ 1727.90
  • Silver -0.99 @ 23.34
  • Copper -0.05 @ 4.29
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