Market Remarks

Morning Notes – Friday, December 10, 2021

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher at 8:45 AM; sharp rise following CPI report at 8:30 AM
  • The odds are for an up day with elevated volatility and a good chance of a sideways to down move from pre-open levels around 4700.00 – watch for a break below 4679.75 for a change of sentiments
  • Key economic data report due during the day:
    • CPI ( 0.8% vs. 0.7% est.; prev. 0.9%) at 8:30 AM
    • Core CPI ( 0.5% vs. 0.5% est.; prev. 0.6%) at 8:30 AM
    • Prelim UoM Consumer Sentiment ( 67.9 est.; prev. 67.4) at 10:00 AM
    • Prelim UoM Inflation Expectations ( prev. 4.9%) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4695.26, 4681.01, and 4665.98
  • Critical resistance levels for S&P 500 are 4705.06, 4722.04, and 4731.99
  • Key levels for E-mini futures: break above 4706.00, the high of 10:00 PM on December 8 and break below 4679.75, the low of 8:00 AM

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (December 2021) closed at 4666.75 and the index closed at 4667.45 – a spread of about +0.25 points; futures closed at 4699.00 for the day; the fair value is -0.50
  • Pre-NYSE session open, futures are higher – at 8:45 AM, S&P 500 futures were up by +35.00; Dow by +201; and NASDAQ by +140.00

Markets Around The World

  • Markets in the East closed lower
  • European markets are lower
  • Currencies (Compared to two weeks ago):
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • INR/USD
    • EUR/USD
    • GBP/USD
    • USD/CAD
    • NZD/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • Precious metals are lower
    • Industrial metals are mostly higher
    • Soft commodities are mixed
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 1.508%, up +2.6 basis points from two weeks ago;
    • 30-years is at 1.868%, up +4.1 basis points;
    • 2-years yield is at 0.696%, up +19.2 basis points;
    • The 10-Year-&-2-Year spread is at 0.812, down from 0.978
    • The 30-Year-&-10-Year spread is at 0.360, down from 0.345
  • VIX
    • At 19.58 @ 8:45 AM; down from the last close; below 5-day SMA;
    • Recent high = 35.32 on December 3; low =  16.03 on November 16
    • Sentiment: Risk-On

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

Monthly
  • November 2021 was a Shooting Star candle at all-time highs; watch for a close below November’s lows;
    • Stochastic (9, 1, 3): %K crossed below %D; from near 100; %D Bearish Divergence
    • RSI-9 is turning down from above 75; Bearish Divergence
    • Above the upper band of a 120-month regression channel;
  • Confirmed Uptrend: sequence of higher highs and higher lows
Weekly:
  • The week ending on December 3 was a red spinning top candle following a large Bearish Engulfing candle
    • Stochastic (9,1, 3): %K is below %D; near 55
    • RSI-9 is just above 50
  • The week was down -56.19 or -1.2%; the 5-week ATR  is 117.74
  • A down week; third in the last five weeks, and fourth in the previous ten weeks
  • The weekly pivot point=4568.83, R1=4642.55, R2=4746.66; S1=4464.72, S2=4391.00; S1 pivot level was breached
  • At/below 10-week EMA; above 39-week SMA; above 89-week SMA
  • Uptrend Under Pressure
Daily
  • A red candle with almost no upper and lower shadows; closed below the previous day’s lows; near all-time highs
    • Stochastic (9, 1, 3): %K crossed below %D from above 90
    • RSI-9 turned down from above 60 to near 50; above 8-day EMA
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Drifting down from near the upper limit of  a horizontal channel that was broken to the downside on November 26; rising since 12:00 Am after making a small double bottom
    • RSI-21 up above 55 from near 30 after making Bullish Divergence
  • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Side-Up
30-Minute (E-mini futures)
  • Moving sideways to down since 10:00 AM on December 7; moving up since 3:00 PM on December 3; broke above a Horizontal Channel on Monday; 100% extension target near 4690.00 is achieved; the 161.8% extension target is near 4750.00
    • RSI-21 has risen above 50 from near 30 at 12:30 AM
    • Above EMA20 but at/below EMA10 of EMA50
  • Bias: Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving up since 3:15 AM
  • The Bollinger Band is expanding since 8:15 AM
    • Stochastic (9, 1, 3): %K crossed above %D at 8:15 AM from near 20
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mostly lower on Thursday, December 9, in mostly lower volume. Dow Jones Transportation Average closed down and NASDAQ Composite traded in higher volume. The day’s price range was small with no strong directional bias.

From Briefing.com:

The S&P 500 declined 0.7% on Thursday, as the market consolidated its gains from the prior three days. The Nasdaq Composite (-1.7%) and Russell 2000 (-2.3%) struggled with steeper losses, while the Dow Jones Industrial Average (unch) closed flat after being down 0.5% intraday.

Nine of the 11 S&P 500 sectors closed lower, including the consumer discretionary (-1.7%), information technology (-1.1%), and real estate (-1.4%) sectors with losses over 1.0%. The defensive-oriented health care (+0.3%) and consumer staples (+0.1%) sectors closed higher.

[…]

The 10-yr yield decreased two basis points to 1.49% despite weekly initial claims falling to their lowest level (184,000) since Sept. 6, 1969. The 2-yr yield was unchanged at 0.68%. WTI crude futures fell 2.2%, or $1.56, to $70.87/bbl.

[…]
  • Initial claims for the week ending December 4 dropped by 43,000 to 184,000 (Briefing.com consensus 228,000). That is the lowest level since September 6, 1969. Continuing claims for the week ending November 27 increased by 38,000 to 1.992 million.
  • […]
  • Wholesale inventories increased 2.3% m/m in October (Briefing.com consensus 2.2%) following a 1.4% increase in September.
[…]
  • S&P 500 +24.3% YTD
  • Nasdaq Composite +20.4% YTD
  • Dow Jones Industrial Average +16.8% YTD
  • Russell 2000 +12.4% YTD

Overseas: 

  • Europe: DAX -0.3%, FTSE -0.2%, CAC -0.1%
  • Asia: Nikkei -0.5%, Hang Seng +1.1%, Shanghai +1.0%

Commodities: 

  • Crude Oil -1.79 @ 70.62
  • Nat Gas -0.03 @ 3.80
  • Gold -9.60 @ 1776.70
  • Silver -0.46 @ 22.01
  • Copper -0.05 @ 4.33
Exit mobile version