Market Remarks

Morning Notes – Monday, November 8, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher at 9:00 AM; moving up since 8:45 PM on Sunday
  • The odds are for an up day – watch for a break below 4690.00 for a change of sentiments
  • No key economic data report due during the day:

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4692.25, 4681.32, and 4667.78
  • Critical resistance levels for S&P 500 are 4718.50, 4736.30, and 4754.09
  • Key levels for E-mini futures: break above 4709.00, the high of 11:45 AM on Friday and break below 4690.00, the low of 5:00 AM

Pre-Open

  • On Friday at 4:00 PM, S&P futures (December 2021) closed at 4690.00 and the index closed at 4697.53 – a spread of about -7.50 points; futures closed at 4690.25 for the day; the fair value is -0.25
  • Pre-NYSE session open, futures are higher – at 8:45 AM, S&P 500 futures were up by +8.25; Dow by +134; and NASDAQ by +2.00

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Mumbai, and Singapore closed higher; Hong Kong, Tokyo, Sydney, and Seoul closed lower
  • European markets are mixed – Germany, the UK, Spain, and Italy are down; France, Switzerland, and STOXX 600 are up
  • Currencies (Compared to two weeks ago):
    Up Down
    • Dollar index
    • USD/CAD
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • Precious metals are mixed
    • Industrial metals are lower
    • Soft commodities are mostly higher
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 1.483%, down -17.2 basis points from two weeks ago;
    • 30-years is at 1.906%, down -18.5 basis points;
    • 2-years yield is at 0.399%, down -5.8 basis points;
    • The 10-Year-&-2-Year spread is at 1.084, down from 1.198
    • The 30-Year-&-10-Year spread is at 0.423, down from 0.436
  • VIX
    • At 16.59 @ 8:00 AM; up from the last close; above 5-day SMA;
    • Recent high = 24.89 on October 1; low =  14.73 on November 4
    • 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 November 5 a relatively larger 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 Doji candle at the all-time highs;
    • Stochastic (9, 1, 3): %K crossed below %D above 90
    • RSI-9 is above 80; 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)
  • Trending up since October 1 in steps;
    • RSI-21 is above 65 after dropping near 50;
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
  • Moving up since 8:30 PM after declining from the all-time high of 4711.75 at 10:00 AM on Friday;
    • RSI-21 is above 60
    • Above EMA10 of EMA50, which is above EMA20
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving  up since 12:45 AM;
  • The Bollinger Band is expanding since 3:30 AM with price walking up the upper band
    • Stochastic (9, 1, 3): %K is crisscrossing %D above 80;
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Friday, November 5, in higher volume. Major indices gapped up at the open but then they retreated before advancing again in the afternoon. S&P 500, Dow Jones Industrial Average, NASDAQ Composite, Russell 2000, NYSE Composite, and Wilshire 5000 Total Market Index made all-time closing and intraday highs. 

For the week, major US indices closed higher in mixed volume. Markets in Asia were mixed but the European markets closed higher. The dollar index was up, energy futures were mixed, most metals were up and soft commodities were mixed. The US Treasury yields inched lower. All but two S&P sectors – Financials and Healthcare – closed higher.

From Briefing.com:

Each of the major indices set intraday and closing record highs on Friday, […]

The market, however, closed off session highs. The S&P 500 (+0.4%), Nasdaq Composite (+0.2%), and Dow Jones Industrial Average (+0.6%) rose between 0.2-0.6% after being up 0.7-1.0% early in the session. The Russell 2000 outperformed with a 1.4% gain.

Ten of the 11 S&P 500 sectors contributed to the advance. The energy (+1.4%) and industrials (+1.0%) sectors finished atop the standings with gains of at least 1.0%, while the health care sector (-1.0%) fell 1%, ironically due to the success of Pfizer.

[…]

As for the jobs data, nonfarm payrolls increased by 531,000 (Briefing.com consensus 400,000), the unemployment rate improved to 4.6% (Briefing.com consensus 4.7%) from 4.8% in September, and average hourly earnings increased 0.4% m/m (Briefing.com consensus 0.4%).

Despite the wage inflation, the 10-yr yield fell seven basis points to 1.45% in a move that signaled easing inflation concerns. The 2-yr yield decreased two basis points to 0.39%. The U.S. Dollar Index decreased 0.2% to 94.20.

[…]
  • S&P 500 +25.1% YTD
  • Nasdaq Composite +23.9% YTD
  • Russell 2000 +23.4% YTD
  • Dow Jones Industrial Average +18.7% YTD
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