Market Remarks

Morning Notes – Monday, November 15, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher at 9:00 AM; moving up since 2:30 AM after making a small Double Bottom patter;
  • The odds are for an up day – watch for a break below 4687.50 for change if sentiments
  • Key economic data report due during the day:
    • Empire State Manufacturing PMI ( 30.1 vs. 22.1 est.; prev. 19.8) at 8:30 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4688.47, 4673.20, and 4648.31
  • Critical resistance levels for S&P 500 are 4708.53, 4714.92, and 4718.50
  • Key levels for E-mini futures: break above 4697.50, the high of 8:15 AM and break below 4687.50, the low of 7:15 AM

Pre-Open

  • On Friday at 4:00 PM, S&P futures (December 2021) closed at 4677.25 and the index closed at 4682.85 – a spread of about -5.50 points; futures closed at 4678.25 for the day; the fair value is -1.00
  • Pre-NYSE session open, futures are higher – at 9:00 AM, S&P 500 futures were up by +15.50; Dow by +135; and NASDAQ by +68.50

Markets Around The World

  • Markets in the East closed mostly higher – Shanghai closed down
  • European markets are mostly higher – Switzerland is lower
  • Currencies (Compared to two weeks ago):
    Up Down
    • Dollar index
    • USD/CHF
    • USD/CAD
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are lower
    • Precious metals are higher
    • Industrial metals are higher
    • Soft commodities are mostly higher
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 1.582%, up +2.5 basis points from two weeks ago;
    • 30-years is at 1.955%, up +1.3 basis points;
    • 2-years yield is at 0.524%, up +2.3 basis points;
    • The 10-Year-&-2-Year spread is at 1.058, down from 1.056
    • The 30-Year-&-10-Year spread is at 0.373, down from 0.385
  • VIX
    • At 16.71 @ 8:15 AM; up from the last close; below 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 12 was a relatively small red candle with long lower shadow and small upper shadow
    • Stochastic (9,1, 3): %K crossed below %D; above 90
    • RSI-9 is turning down above 70
  • The week was down -14.68 or -0.3%; the 5-week ATR  is 107.26
  • A down week; first in the last five weeks, and fourth in the previous ten weeks
  • The weekly pivot point=4676.21, R1=4721.56, R2=4760.27; S1=4637.50, S2=4592.15; no pivot levels were breached
  • Above 10-week EMA; above 39-week SMA; above 89-week SMA
  • Uptrend Resumed
Daily
  • A green candle with almost no upper and lower shadows
    • Stochastic (9, 1, 3): %K is crossing above %D; just above 50
    • RSI-9 is turning up from just above 60; below 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; drifting sideways to up since 6:00 AM on November 5
    • RSI-21 has been rising from near 25 at 2:00 PM on November 10; above 75;
  • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving up 9:30 AM on November 12 following a one-day sideways move
    • RSI-21 moving along just above 65
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways to up since 9:45 PM;
  • The Bollinger Band is slightly expanded;
    • Stochastic (9, 1, 3): %K is below %D at 9:15 AM;
  • Bias: Side-Up

Previous Session

Major U.S. indices closed higher on Friday, November 12, in higher volume. Most major indices moved higher from the open and close near the highs after a brief sideways move in the afternoon.

For the week, major indices closed mostly lower in mixed volume. NASDAQ Composite closed higher for the week. The Asian and the European exchanges closed mixed. The dollar index was up energy futures were down and most commodities were up. The US Treasury yields inched higher.

From Briefing.com:

The large-cap indices posted decent gains on Friday, recouping some weekly losses, thanks to strong leadership from the mega-cap stocks. The S&P 500 gained 0.7%, the Nasdaq Composite gained 1.0%, and the Dow Jones Industrial Average gained 0.5%. The small-cap Russell 2000 increased just 0.1%. […]

The mega-caps carried the S&P 500 information technology (+1.2%) and communication services (+1.7%) sectors to the top of the leaderboard. Conversely, the energy (-0.3%) and utilities (-0.2%) sectors were the only sectors that ended the day in negative territory.

[…]

Separately, the preliminary University of Michigan Index of Consumer Sentiment for November dropped to 66.8 (Briefing.com consensus 71.7) from 71.7 in October. The November reading was the lowest level for the index since November 2012 amid burgeoning concerns about rising inflation and reduced living standards.

The 10-yr yield, which dipped to 1.54% prior to the report’s release, rebounded to 1.58%, or two basis points above Wednesday’s settlement. The 2-yr yield increased two basis points to 0.52% after flirting with 0.55% overnight.

The U.S. Dollar Index declined 0.1% to 95.09. WTI crude futures fell 0.7%, or $0.54, to $80.83/bbl. The CBOE Volatility Index (16.29, -1.37, -7.8%) dropped below 16.50.

[…]
  • S&P 500 +24.7% YTD
  • Nasdaq Composite +23.1% YTD
  • Russell 2000 +22.1% YTD
  • Dow Jones Industrial Average +18.0% YTD
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