Market Remarks

Morning Notes – Monday, November 1, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher at 8:30 AM;
  • The odds are for an up day with a good chance of sideways to a down move from pre-open levels around 4610.00 – watch for a break above 4619.25 and a break below 4602.00 for clarity
  • Key economic data report due during the day:
    • Final Manufacturing ( 59.2 est.; prev. 59.2) at 9:45 AM
    • ISM Manufacturing PMI  ( 60.4 est.; prev. 61.1) at 10:00 AM
    • Construction Spending ( 0.6% est.; prev. 0.0%) at 10:00 AM
    • ISM Manufacturing Prices ( 82.5 est.; prev. 81.2) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4608.08, 4589.00, and 4567.59
  • Critical resistance levels for S&P 500 are 4619.78, 47=634.17, and 4660.27
  • Key levels for E-mini futures: break above 4619.50, the high of 7:00 PM and break below 4602.00, the low of 2:30 AM

Pre-Open

  • On Friday at 4:00 PM, S&P futures (December 2021) closed at 4597.25 and the index closed at 4605.38 – a spread of about -8.25 points; futures closed at 4597.00 for the day; the fair value is +0.25
  • Pre-NYSE session open, futures are higher – at 8:30 AM, S&P 500 futures were up by +17.25; Dow by +144; and NASDAQ by +52.50

Markets Around The World

  • Markets in the East closed mostly higher – Shanghai and Hong Kong closed lower
  • European markets are higher
  • Currencies (Compared to two weeks ago):
    Up Down
    • Dollar index
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • INR/USD
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • USD/CHF
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher
    • Precious metals are higher
    • Industrial metals are lower
    • Soft commodities are mixed
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 1.577%, up +0.1 basis points from two weeks ago;
    • 30-years is at 1.966%, down -8.5 basis points;
    • 2-years yield is at 0.501%, up +10.6 basis points;
    • The 10-Year-&-2-Year spread is at 1.076, down from 1.181
    • The 30-Year-&-10-Year spread is at 0.389, down from 0.475
  • VIX
    • At 16.64 @ 8:45 AM; up from the last close; above 5-day SMA;
    • Recent high = 24.89 on October 1; low =  14.84 on October 22
    • Sentiment: Risk-On

The trend and patterns on various time frames for S&P 500:

Monthly
  • October 2021 was a Bullish Engulfing candle with  small lower shadow and almost no upper shadow; at all-time closing and intra-month highs;
    • Stochastic (9, 1, 3): %K above %D; near 100;
    • RSI-9 is turning up; above 75
    • Above the upper band of a 120-month regression channel;
  • Confirmed Uptrend: sequence of higher highs and higher lows
Weekly:
  • The week ending on October 29 was a green candle at all-time highs
    • Stochastic (9,1, 3): %K is above %D; above 90
    • RSI-9 is above 70
  • The week was up +60.48 or +1.3%; the 5-week ATR  is 129.73
  • An up week; fourth in the last five weeks, and seventh in the previous ten weeks
  • The weekly pivot point=4583.61, R1=4629.85, R2=4654.33; S1=4559.13, S2=4512.89; R1 pivot level was breached
  • Above 10-week EMA; above 39-week SMA; above 89-week SMA
  • Uptrend Resumed
Daily
  • A green candle with small upper and lower shadows at the all-time high;
    • Stochastic (9, 1, 3): %K is above %D; near 100
    • RSI-9 is near 75; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA
  • Uptrend Resumed
2-Hour (E-mini futures)
  • Broke above a Horizontal Channel – 61.8% extension target near 4618.00 is achieved; the 100% extension target is near 4635.00
    • RSI-21 is moving up since 6:00 AM on Friday; Bearish Divergence; just below 75
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side-Up
30-Minute (E-mini futures)
  • Moving sideways to up since 6:00 PM on Sunday after breaking above Friday’s close;
    • RSI-21 is just above 60 after making a Bearish Divergence at 67.24
    • Above EMA10 of EMA50, which is above EMA20
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 4:00 AM;
  • The Bollinger Band is contracting since 6:45 with price drifting down from the upper band to below the middle band;
    • Stochastic (9, 1, 3): %K is crisscrossing %D below 20
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mixed on Friday, October 29, in mixed volume. The major indices opened lower but then drifted higher for the rest of the day. S&P 500 and NASDAQ Composite made all-time closing and intraday highs. Dow Jones Industrial Average and Wilshire 5000 Total Market Index made all-time closing highs.

For the week, major US indices mostly closed higher in mostly higher volume. NYSE Composite was down. The markets in Asia closed mostly lower and the European markets were up. Energy futures were mixed. Most hard commodities were down and most soft commodities were up.

From Briefing.com:

The S&P 500 (+0.2%) and Nasdaq Composite (+0.3%) set intraday and closing record highs on Friday in a resilient, yet defensive, session. The Dow Jones Industrial Average (+0.3%) also closed at a record high with a comparable 0.3% gain, while the Russell 2000 (-0.03%) closed fractionally lower. […]

The mega-cap gains helped mitigate the negative influence from seven of the 11 S&P 500 sectors. The real estate sector (-1.2%) underperformed and was the only sector that lost more than 1.0%.

[…]

The 10-yr yield decreased one basis point to 1.56% after flirting with 1.63% in the wake of the PCE data. The 2-yr yield decreased one basis point to 0.49% after flirting with 0.56% intraday. WTI crude futures rose 0.9%, or $0.73, to $83.52/bbl.

[…]
  • Personal income declined 1.0% month-over-month in September (Briefing.com consensus -0.2%) with the expiration of unemployment benefits and decreases in general in government social benefits. Personal spending was up 0.6% month-over-month (Briefing.com consensus +0.4%). The PCE Price Index increased 0.3% month-over-month, as expected, and the core-PCE Price Index increased 0.2%, also in-line with estimates. On a year-over-year basis, the PCE Price Index was up 4.4%, versus 4.2% in August, and the core-PCE Price Index was up 3.6% for the fourth straight month, exuding some stickiness in inflation pressures.
  • [ …]
  • The final October University of Michigan Index of Consumer Sentiment increased to 71.7 (Briefing.com consensus 71.4) from the preliminary reading of 71.4. The final reading for September was 72.8.
  • […]
  • The Q3 Employment Cost Index was up 1.3% (Briefing.com consensus +0.8%) following a 0.7% increase in the second quarter. Wages and salaries, which account for about 70% of compensation costs, increased 1.5%, while benefit costs, which make up the remainder of compensation costs, increased 0.9%.
  • […]
  • The Chicago PMI increased to 68.4 in October (Briefing.com consensus 63.1) from 64.7 in September.
[…]
  • S&P 500 +22.6% YTD
  • Nasdaq Composite +20.3% YTD
  • Dow Jones Industrial Average +17.0% YTD
  • Russell 2000 +16.3% YTD
Exit mobile version