Market Remarks

Morning Notes – Tuesday, February 8, 2022

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are a bit lower 8:15 AM; trying to break below a symmetrical triangle on the 30-minute chart
  • The odds are for a sideways to down day; watch for a break above 4496.50 and a break below 4463.25 for clarity
  • Key economic data report due during the day:
    • Trade Balance (-80.7B vs.  -83.0B est.; prev. 80.2B) at 8:30 AM

Directional Bias Before Open:

  • Weekly: Correction
  • Daily: Confirmed Uptrend
  • 120-Min: Down-Side
  • 30-Min: Side
  • 15-Min: Down-Side
  • 6-Min: Side-Down

Key Levels:

  • Critical support levels for S&P 500 are 4471.47, 4451.50, and 4414.02
  • Critical resistance levels for S&P 500 are 4507.26, 4521.86, and 4539.66
  • Key levels for E-mini futures: break above 4496.50, the high of 4:30 AM and break below 4463.25, the low of 7:00 AM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (March 2022) closed at 4476.75 and the index closed at 4483.87 – a spread of about -7.00 points; futures closed at 4475.75 for the day; the fair value is +1.00
  • Pre-NYSE session open, futures are mixed – at 8:00 AM, S&P 500 futures were down by-5.25; Dow up by +16; and NASDAQ down by -38.00

Markets Around The World

  • Markets in the East closed mostly higher – Hong Kong closed down
  • European markets are mixed – the UK, France, Itlay, Spain, and Italy are higher; Germany, Switzerland, and STOXX 600 are lower;
  • Currencies (Compared to two weeks ago):
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • Dollar index
    • AUD/USD
    • NZD/USD
    • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher
    • Precious metals are lower
    • Industrial metals are mostly lower
    • Soft commodities are mixed
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 1.916%, up +18.1 basis points from two weeks ago;
    • 30-years is at 2.218%, up +13.5 basis points;
    • 2-years yield is at 1.292%, up +30.5 basis points;
    • The 10-Year-&-2-Year spread is at 0.624, down from 0.748
    • The 30-Year-&-10-Year spread is at 0.302, down from 0.348
  • VIX
    • At 23.16 @ 8:15 AM; up from the last close; at/above the 5-day SMA;
    • Recent high = 38.9 on January 24; low = 20.46 on February 2
    • Sentiment: Risk-Off

The trend and patterns in 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 February 2 was a green candle  with a long upper shadow and almost no lower shadow
    • Stochastic (9,1, 3): %K is crossing above %D from near zero
    • RSI-9 has turned up; just below 40
  • The week was up +33.91 or +1.5%; the 5-week ATR  is 200.38
  • An up week; second in the last five weeks, and fifth in the previous ten weeks
  • The weekly pivot point=4504.29, R1=4592.55, R2=4684.58; S1=4411.26, S2=4322.00; R1 pivot level was breached
  • Below 10-week EMA and 39-week SMA; above 89-week SMA
  • In Correction
Daily
  • A small red spinning top indecisive candle;
    • Stochastic (9, 1, 3): %K is below %D
    • RSI-9 is turning up just below 50; above 8-day EMA;
  • Below 20-day EMA, 50-day EMA, and 100-day SMA; above 200-day SMA
  • Confirmed Uptrend
2-Hour (E-mini futures)
  • Moving down since 12:00 PM on February 2 from a resistance level at the downtrend line from the all-time highs; downtrend since January 4 – lower lows and lower highs;
    • RSI-21 is moving along below 40
    • At/below EMA 20, at/above EMA10 of EMA50
  • Bias: Side
30-Minute (E-mini futures)
  • Moving sideways to up since 12:00 PM on February 3 within an 80-point range
    • RSI-21 is moving just above 40
    • Below EMA20, which is below EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is drifting sideways to down since 9:30 PM on February 6
  • The Bollinger Band is expanding slightly since 6:00 Am with price walking down the lower bound
    • Stochastic (9, 1, 3): %K is above %D since 6:30 AM
  • Bias: Down-Side

Previous Session

Major U.S. indices closed mixed on Monday, February 7, in mostly lower volume. Dow Jones Industrial Average, Russell 2000, and NYSE Composite closed lower. Dow Jones Transportation Average traded in higher volume. The day’s price action was small and the indices mostly traded sideways before losing ground in the final half-hour of trading.

From Briefing.com:

The S&P 500 declined 0.4% on Monday amid some slippage in the last 45 minutes of action, which erased a 0.5% gain for the benchmark index. The Nasdaq Composite fell 0.6% after being up 1.0% intraday. The Dow Jones Industrial Average (unch) closed flat, while the Russell 2000 outperformed with a 0.5% gain. […]

Trading conviction was reserved for the energy (+1.3%) and communication services (-2.3%) sectors, which diverged in opposite directions, as well as individual story stocks.

[…]

The 2-yr yield declined three basis points to 1.29%, and the 10-yr yield declined one basis point to 1.92%. The U.S. Dollar Index declined 0.1% to 95.42.

[…]
  • Consumer credit increased by $18.9 billion in December (Briefing.com consensus $25.0 billion). The prior month saw a downward revision to $38.9 bln from $39.9 bln.
[…]
  • Dow Jones Industrial Average -3.4% YTD
  • S&P 500 -5.9% YTD
  • Nasdaq Composite -10.4% YTD
  • Russell 2000 -10.4% YTD

Overseas: 

  • Europe: DAX +0.7%, FTSE +0.8%, CAC +0.8%
  • Asia: Nikkei -0.7%, Hang Seng +0.0%, Shanghai +2.0%

Commodities: 

  • Crude Oil -0.97 @ 91.37
  • Nat Gas -0.26 @ 4.25
  • Gold +15.40 @ 1822.00
  • Silver +0.61 @ 23.07
  • Copper -0.01 @ 4.48
Exit mobile version