Market Remarks

Morning Notes – Monday, January 3, 2022

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher at 9:00 AM; moved down from 4791.00 at 6:00 AM to near 4775.00 just before the NYSE open
  • The odds are for an up day with a good chance of a sideways to down move from pre-open levels – watch for a break below 4771.25 and 4757.25 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-Side
  • 30-Min: Side-Up
  • 15-Min: Up-Side
  • 6-Min: Side-Down

Key Levels:

  • Critical support levels for S&P 500 are 4784,99, 4725.00, and 4703.96
  • Critical resistance levels for S&P 500 are 4784.35, 4801.17, and 4808.93
  • Key levels for E-mini futures: break above 4791.25, the high of 6:00 AM and break below 4771.25, the low of 2:00 AM

Pre-Open

  • On Friday at 4:00 PM, S&P futures (March 2022) closed at 4759.50 and the index closed at 4766.18 – a spread of about -6.75 points; futures closed at 4758.50 for the day; the fair value is +1.00
  • Pre-NYSE session open, futures are higher – at 8:45 AM, S&P 500 futures were up by +15.00; Dow by +98; and NASDAQ by +55.25

Markets Around The World

  • Markets in the East closed mostly higher – Hong Kong closed down; Shanghai, Tokyo, and Sydney were closed
  • European markets are higher – the UK is closed
  • Currencies (Compared to two weeks ago):
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • Dollar index
    • USD/CHF
    • USD/CAD
    • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher
    • Precious metals are higher
    • Industrial metals are higher
    • Soft commodities are mostly higher
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 1.583%, up +18.1 basis points from two weeks ago;
    • 30-years is at 1.963%, up +14.5 basis points;
    • 2-years yield is at 0.731%, up +9.7 basis points;
    • The 10-Year-&-2-Year spread is at 0.854, up from 0.768
    • The 30-Year-&-10-Year spread is at 0.382, down from 0.417
  • VIX
    • At 17.29 @ 8:00 AM; up from the last close; at/below 5-day SMA;
    • Recent high = 27.39 on December 20; low =  16.03 on November 16
    • Sentiment: Risk-Neutral

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

Monthly
  • December 2021 was a green candle that opened above the previous week’s real-body and closed higher with a small upper shadow and a slightly longer lower shadow; at all-time highs
    • Stochastic (9, 1, 3): %K crossed above %D; above 90;
    • RSI-9 is turning up from 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 December 31 was a small green candle like a tear-drop
    • Stochastic (9,1, 3): %K is turning down above %D; near 80
    • RSI-9 is just above 65
  • The week was up +40.39 or +0.9%; the 5-week ATR  is 155.50
  • An up week; third in the last five weeks, and sixth in the previous ten weeks
  • The weekly pivot point=4769.70, R1=4805.41, R2=4844.64; S1=4730.47, S2=4694.76; R1 pivot level was breached
  • Above 10-week EMA; above 39-week SMA; above 89-week SMA
  • Uptrend Resumed
Daily
  • A red candle that looks like a tear-drop near all-time highs
    • Stochastic (9, 1, 3): %K is below %D; just below 90
    • RSI-9 is moving down; just below 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)
  • Moving within a Horizontal Channel between 4798.00 and 4750.00 since 10:00 AM on December 27;
    • RSI-21 has risen to near 60 from near 20 at 6:00 PM on December 30
  • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving up in an up-down manner since 7:00 PM on December 30 sideways; moved up from 4750.00 to 4791.00 at 6:00 Am and now down to 4775.00;
    • RSI-21 has moved up from near 25 to near 55
    • Below EMA10 of EMA50, which is below EMA20
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving up  since 2:00 AM on December 31
  • The Bollinger Band is expanding since 7:00 AM with the price falling from the upper band to below the middle band
    • Stochastic (9, 1, 3): %K is crisscrossing below %D below 15
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mostly lower on Friday, December 31, in mostly the higher volume. Dow Jones Transportation Average closed higher in lower volume. The range of the day’s price action was small and the indices have mostly moved sideways over the past few days.

For the week, the major US indices closed mostly higher in lower volume during the year’s final week. NASDAQ Composite closed lower. Most Asian and European markets closed up. The dollar index was down, the energy futures were mixed, the precious metals were up, the industrial metals were mostly down, and the soft commodities were mixed. The US Treasury yields closed up for the week and all but one S&P sector – Telecommunications – closed higher for the week.

From Briefing.com:

The major indices declined modestly on Friday amid some slippage into the close, but still wrapped up 2021 with double-digit percentage gains. The Nasdaq Composite fell 0.6% amid weakness in the mega-caps, while the S&P 500 (-0.3%), Dow Jones Industrial Average (-0.2%), and Russell 2000 (-0.2%) closed slightly lower. […]

Six of the 11 S&P 500 sectors closed higher while five closed lower. The consumer staples sector (+0.7%) was the only sector that gained more than 0.5%, while the communication services sector (-1.2%) declined more than 1.0%.

[…]

The Treasury market had an uneventful, abbreviated session. The 2-yr yield decreased one basis point to 0.73% (+61 bps in 2021), and the 10-yr yield was unchanged at 1.51% (+59 bps in 2021). The U.S. Dollar Index decreased 0.4% to 95.63. WTI crude futures fell 2.2%, or $1.70, to $75.15/bbl (+55.7% in 2021).

[…]
  • S&P 500 +26.9% YTD
  • Nasdaq Composite +21.4% YTD
  • Dow Jones Industrial Average +18.7% YTD
  • Russell 2000 +13.8% YTD
Exit mobile version