Market Remarks

Morning Notes – Wednesday September 8, 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 4524.00 for a change of fortunes
  • Key economic data report due during the day:
    • JOLTS Jobs Openings ( 10.03M est.; prev. 10.07M) at 10:00 AM
    • Beige Book at 2:00 PM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4513.00, 4505.85, and 4487.62
  • Critical resistance levels for S&P 500 are 4524.22, 4529.26, and 4537.36
  • Key levels for E-mini futures: break above 4524.50, the high of 10:00 PM and break below 4503.50, the low of 5:00 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (September 2021) closed at 4519.00 and the index closed at 4520.03 – a spread of about -1.00 points; futures closed at 4519.25 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures are lower – at 8:00 AM, S&P 500 futures were down by -5.25; Dow by -46; and NASDAQ by -10.25

Markets Around The World

  • Markets in the East closed mostly lower – Tokyo closed higher
  • European markets are lower
  • Currencies (from two weeks ago):
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • Dollar index
    • INR/USD
  • Commodities (from two weeks ago):
    • Energy futures are higher
    • Precious metals are mixed
    • Industrial metals are mostly higher
    • Most soft commodities are mixed
  • Treasuries (from two weeks ago)
    • 10-years yield closed at 1.370%, up +8.0 basis points from two weeks ago;
    • 30-years is at 1.984%, up +7.7 basis points;
    • 2-years yield is at 0.224%, down -0.6 basis points;
    • The 10-Year-&-2-Year spread is at 1.146, up from 1.060
  • VIX
    • At 18.50 @ 6:45 AM; up from the last close; above 5-day SMA;
    • Recent high =  24.74 on August 19; low =  15.19 on August 13
    • 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 September 3 was a green candle that opened higher with a small upper shadow and almost no lower shadow; at all-time highs
    • Stochastic (9,1, 3): %K crossed  above %D; near 100
    • RSI-9 is above 70
  • The week was up +26.06 or +0.6%; the 5-week ATR is 66.42
  • An up week; fourth in the last five weeks, and seventh in the last ten weeks
  • The weekly pivot point=4531.68, R1=4539.60, R2=4563.77; S1=4517.51, S2=4499.59; R1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend since March 23, 2020
Daily
  • A red candle with almost no upper shadow and a small lower shadow near all-time highs
    • %K is below %D below 70; Bearish Divergence
    • RSI-9 is near 60; above 8-day EMA; Bearish Divergence
  • Above 20-day EMA, 50-day EMA, 100-day, and 200-day SMA
  • Uptrend
2-Hour (E-mini futures)
  • Broke below within an up-sloping channel; uptrend since 4:00 AM on August 19;
    • RSI-21 is bouncing from 20 to near 45; Bullish Divergence at 2:00  AM
  • Below EMA20, which is below EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Drifting down since 9:30 AM on September 6
    • RSI-21 is moving up since 10:00 AM on September 7; Bullish Divergence at 4:00 AM
    • Above EMA20, at/below EMA10 of EMA50
  • Bias: Side-Down
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving down since 7:15 PM on September 6
  • The Bollinger Band is expanding since 3:00 AM
    • Stochastic (9, 1, 3): %K is below %D
  • Bias: Side-Down

Previous Session

Major U.S. indices closed mostly lower on Tuesday, September 7 in mostly higher volume. NASDAQ Composite advanced and made all-time highs in lower volume.

Only one S&P sector – Energy – closed up. Consumer Discretionary, Real Estate, and Telecom closed unchanged and all others closed lower.

From Briefing.com:

The Nasdaq Composite (+0.1%) eked out intraday and closing record highs on Tuesday, while the S&P 500 (-0.3%), Dow Jones Industrial Average (-0.8%), and Russell 2000 (-0.7%) closed lower, as investors leaned defensively into the mega-cap stocks. […]

Declining issues outpaced advancing issues by a 2:1 margin at the NYSE, the Invesco S&P 500 Equal Weight ETF (RSP 155.57, -1.31, -0.8%) declined 0.8%, and eight of the 11 S&P 500 sectors closed in negative territory. The industrials (-1.8%), utilities (-1.4%), and real estate (-1.1%) sectors lost more than 1.0%.

[…]

The mega-caps lifted the S&P 500 information technology (+0.03%), consumer discretionary (+0.4%), and communication services (+0.5%) sectors into positive territory.

[…]

The 10-yr yield increased five basis points to 1.37% while the 2-yr yield increased one basis point to 0.21%. The U.S. Dollar Index advanced 0.6% to 92.55, which was another example of the defensive mindset in the market.

[…]
  • S&P 500 +20.3% YTD
  • Nasdaq Composite +19.3% YTD
  • Russell 2000 +15.2% YTD
  • Dow Jones Industrial Average +14.7% YTD

Overseas: 

  • Europe: DAX -0.6%, FTSE -0.5%, CAC -0.3%
  • Asia: Nikkei +0.9%, Hang Seng +0.7%, Shanghai +1.5%

Commodities: 

  • Crude Oil -0.77 @ 68.38
  • Nat Gas -0.12 @ 4.58
  • Gold -33.90 @ 1799.80
  • Silver -0.37 @ 24.42
  • Copper -0.06 @ 4.28
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