Market Remarks

Morning Notes – Tuesday, February 15, 2022

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher 7:45 AM; higher by 80 points since 2:45 AM
  • The odds are for an up day with elevated volatility; watch for a break below 4436.00 for a change of sentiments
  • Key economic data report due during the day:
    • PPI ( 0.5% est.; prev. 0.2%) at 8:30 AM
    • Core PPI ( 0.5% est.; prev. 0.5%) at 8:30 AM
    • Empire State Manufacturing PMI ( 11.9 est.; prev. -0.7) at 8:30 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4425.20, 4394.52, and 4364.84
  • Critical resistance levels for S&P 500 are 4465.40, 4495.10, and 4526.33
  • Key levels for E-mini futures: break above 4467.75, the high of 7:00 AM and break below 4436.00, the low of 3:30 AM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (March 2022) closed at 4394.75 and the index closed at 4401.67 – a spread of about -7.00 points; futures closed at 4394.00 for the day; the fair value is +0.75
  • Pre-NYSE session open, futures are higher – at 7:45 AM, S&P 500 futures were up by +66.50; Dow by +392; and NASDAQ by +288.75

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Mumbai, and Singapore closed up; Hong Kong, Tokyo, Syndey, and Seoul closed lower
  • European markets are higher
  • Currencies (Compared to two weeks ago):
    Up Down
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • USD/CAD
    • INR/USD
    • Dollar index
    • USD/CHF
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • Precious metals are higher
    • Industrial metals are mostly higher
    • Soft commodities are mostly higher
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 1.996%, up +21.4 basis points from two weeks ago;
    • 30-years is at 2.301%, up +20.3 basis points;
    • 2-years yield is at 1.583%, up +40.2 basis points;
    • The 10-Year-&-2-Year spread is at 0.413, down from 0.601
    • The 30-Year-&-10-Year spread is at 0.305, down from 0.316
  • VIX
    • At 25.67 @ 7:15 AM; down from the last close; above the 5-day SMA;
    • Recent high = 32.04 on February 14; low = 19.93 on February 9
    • Sentiment: Risk-On

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 11 was a Bearish Engulfing candle  with a long upper shadow and almost no lower shadow
    • Stochastic (9,1, 3): %K crossed below %D
    • RSI-9 is just above 40
  • The week was down -81.89 or -1.8%; the 5-week ATR  is 206.92
  • A down week; third in the last five weeks, and fifth in the previous ten weeks
  • The weekly pivot point=4470.03, R1=4538.64, R2=4658.65; S1=4350.02, S2=4281.41; S1 pivot level was breached
  • Below 10-week EMA and 39-week SMA; above 89-week SMA
  • In Correction
Daily
  • A small red candle with a small upper shadow and long lower shadow;
    • Stochastic (9, 1, 3): %K is below %D below 20
    • RSI-9 is below 40; below 8-day EMA;
  • Below 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Moving up since 4:00 AM from 4354.00 after deciding from 4585.00 at 4:00 PM on February 9
    • RSI-21 is just below 60 after rising from near 235 at 4:00 AM
    • Above EMA20 but below EMA10 of EMA50
  • Bias: Down-Side
30-Minute (E-mini futures)
  • Moving sideways to up since 2:00 PM on Friday
    • RSI-21 is above 65
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving up since 2:45 AM;
  • The Bollinger Band is expanding since 3:00 AM with price walking up the upper band
    • Stochastic (9, 1, 3): %K is crisscrossing %D above 80
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mostly lower on Monday, February 14, in lower volume. Dow Jones Transportation Average closed higher. The indices opened lower and then declined in the early afternoon after rising in the late morning trade. They recovered some of the losses in the final two hours of trading.

From Briefing.com:

The S&P 500 declined 0.4% on Monday, as the market remained preoccupied with the Russia-Ukraine situation and a continued rise in interest rates. The Dow Jones Industrial Average and Russell 2000 both declined 0.5%, while the Nasdaq Composite was unchanged.

Nine of the 11 S&P 500 sectors closed lower, paced by losses in the energy (-2.2%), financials (-1.1%), health care (-1.1%), and real estate (-1.0%) sectors. The consumer discretionary (+0.6%) and communication services (+0.3%) sectors closed higher.

[…]

The 2-yr yield rose seven basis points to 1.59% as the CME FedWatch Tool continued to price in more than six rate hikes this year. The 10-yr yield rose four basis points to 2.00%. The U.S. Dollar Index increased 0.3% to 96.35.

[…]
  • Dow Jones Industrial Average -4.9% YTD
  • S&P 500 -7.7% YTD
  • Russell 2000 -10.0% YTD
  • Nasdaq Composite -11.9% YTD

Overseas: 

  • Europe: DAX -2.0%, FTSE -1.7%, CAC -2.3%
  • Asia: Nikkei -2.2%, Hang Seng -1.4%, Shanghai -1.0%

Commodities: 

  • Crude Oil +1.95 @ 95.10
  • Nat Gas +0.20 @ 4.17
  • Gold +23.10 @ 1873.30
  • Silver +0.41 @ 23.82
  • Copper -0.02 @ 4.48
Exit mobile version