Market Remarks

Morning Notes – Monday August 16, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower
  • The odds are for a down day — watch for a break above 4456.50 for a change of sentiments
  • Key economic data report due during the day:
    • Empire State Manufacturing PMI ( 18.3 vs. 28.9 est.; prev. 43.0) at 8:30 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4450.73, 4435.96, and 4430.03
  • Critical resistance levels for S&P 500 are 4460.82, 4468.08, and 4473.28
  • Key levels for E-mini futures: break above 4456.50, the high of 3:00 AM and break below 4441.00, the low of 6:00 AM

Pre-Open

  • On Friday at 4:00 PM, S&P futures (September 2021) closed at 4462.75 and the index closed at 4468.00 – a spread of about -5.75 points; futures closed at 4462.50 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures are lower – at 8:30 AM, S&P 500 futures were down by -15.25; Dow by -122; and NASDAQ down by -48.50

Markets Around The World

  • Markets in the East closed mostly lower –  Shanghai and Mumbai closed higher; Seoul was closed for trading
  • European markets are lower
  • Currencies (from two weeks ago):
    Up Down
    • Dollar index
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • INR/USD
  • Commodities (from two weeks ago):
    • Energy futures are lower
    • Precious metals are lower
    • Industrial metals are mostly lower
    • Most soft commodities are mostly higher
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.267%, up +2.8 basis points from two weeks ago;
    • 30-years is at 1.924%, up +2.7 basis points;
    • 2-years yield is at 0.213%, up +2.5 basis points;
    • The 10-Year-&-2-Year spread is at 1.054, up from 1.051
  • VIX
    • At 17.27 @ 8:15 AM; up from the last close; above 5-day SMA;
    • Recent high =  25.09 on July 19; low =  14.10 on June 29
    • Sentiment: Risk-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 13 was a relatively small green candle with small upper and lower shadows at all-time highs;
    • Stochastic (9,1, 3): %K is above %D; above 90
    • RSI (9) is near 75
  • The week was up +31.48 or +0.7%; the 5-week ATR is 84.42
  • An up week; third in the last five weeks, and seventh in the last ten weeks
  • The weekly pivot point=4453.70, R1=4482.67, R2=4497.33; S1=4439.04, S2=4410.07; R1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A small candle at all-time-highs with almost no upper shadow and a small lower shadow;
    • %K is above %D; near 100
    • RSI-9 is just above 70; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Retreating a bit after breaking above a Horizontal Channel that was formed from July 23 to August 6 between 4420.00 and 4380.00; the 61.8% extension target near 4463.00 is achieved; the 100% extension target is near 4486.00
    • RSI-21 has declined to below 40 from near 75
    • Below EMA20 but above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
  • Drifting lower since 3:30 PM on Friday from 4463.25 to 4410,00;
    • RSI-21 moving below 40
    • Below EMA20, which is below EMA10 of EMA50
  • Bias: Side-Down
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving down since 9:00 PM
  • The Bollinger Band is expanding since 4:15 AM with price moving near the lower band
    • Stochastic (9, 1, 3): %K is below %D since 7:00 AM
  • Bias: Side-Down

Previous Session

Major U.S. indices closed mostly higher on Friday, August 13 in mixed volume.  Russell 2000 and NYSE Composite closed lower. Dow Jones Industrial Average and S&P 500 traded in higher volume.  The day’s price range was small.

For the week, the major US indices mostly closed higher in lower volume. NASDAQ Composite and Russell 2000 closed lower. Markets in Asia mostly closed higher. European markets also closed higher. The dollar index was down, energy and precious metals futures were mixed, and the industrial metals and soft commodities closed higher for the week. The US Treasury yields were mixed and all but two S&P sectors – Energy and Telecom – closed higher for the week.

From Briefing.com:

The stock market ended the week on a mixed note, as the Dow (+0.04%) and S&P 500 (+0.2%) inched to fresh record highs while the Nasdaq (+0.04%) and Russell 2000 (-0.9%) underperformed. […]

Seven sectors finished the day with gains that ranged from 0.1% (materials) to 0.8% (consumer staples). Top-weighted sectors like technology (+0.5%), financials (-0.7%), health care (+0.6%), and consumer discretionary (-0.3%) were mixed, which kept the broader market near the unchanged level throughout the day.

[…]

Energy (-1.3%) finished at the bottom of the leaderboard alongside a $0.74, or 1.1%, drop in the price of crude oil to $68.37/bbl. WTI crude added $0.09 for the week.

[…]
  • The preliminary University of Michigan Consumer Sentiment Index for August had a shocking decline to 70.2 (Briefing.com consensus 81.6) from the final reading of 81.2 for July. That is below the April 2020 low of 71.8 and is one of the largest monthly declines over the past 50 years
  • […]
  • Import prices increased 0.3% in July after increasing a revised 1.1% (from 1.0%) in June. Excluding oil, import prices were unchanged after increasing 0.7% in June. Export prices increased 1.3% after increasing 1.2% in June while export prices excluding agriculture rose 1.6% after rising 1.1% in June.
[…]
  • S&P 500 +19.0% YTD
  • Dow Jones Industrial Average +16.0% YTD
  • Nasdaq Composite +15.0% YTD
  • Russell 2000 +12.6% YTD
Exit mobile version