Market Remarks

Morning Notes – Friday, March 25, 2022

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher at 8:45 AM; moving up since 4:15 AM and then sideways since 7:15 AM around 4527.00
  • The odds are for an up day – watch for a break below 4513.75 for a change of sentiments
  • Key economic data report due during the day:
    • Revised UoM Consumer Sentiments ( 59.7 est.; prev. 59.7) at 10:00 AM
    • Revised UoM Inflation Expectations ( prev. 5.4%) at 10:00 AM
    • Pending Homes Sales ( 1.0% est.; prev. -5.7%) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4520.58, 4504.82, 4485.19, and 4465.17
  • Critical resistance levels for S&P 500 are 4532.73, 4554.18, and 4576.61
  • Key levels for E-mini futures: break above 4531.75, the high of 7:15 AM and break below 4513.00, the low of 6:00 AM

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (June 2022) closed at 4513.25 and the index closed at 4520.16 – a spread of about -7.00 points; futures closed at 4512.50 for the day; the fair value is +0.75
  • Pre-NYSE session open, futures are higher – at 8:30 AM, S&P 500 futures were up by +12.75; Dow by +85; and NASDAQ by +43.00

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Hong Kong, and Mumbai closed lower; Tokyo, Sydney, Seoul, and Singapore closed higher
  • European markets are higher
  • Currencies (Compared to two weeks ago):
    Up Down
    • Dollar index
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • INR/USD
    • USD/CAD
  • 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 2.358%, up +34.7 basis points from two weeks ago;
    • 30-years is at 2.511%, up +11.7 basis points;
    • 2-years yield is at 2.135%, up +43.3 basis points;
    • The 10-Year-&-2-Year spread is at 0.223, down from 0.309
    • The 30-Year-&-10-Year spread is at 0.153, down from 0.383
  • VIX
    • At 21.74 @ 8:00 AM; up from the last close; below the 5-day SMA;
    • Recent high = 33.83 on March 15; low = 19.93 on February 9
    • Sentiment: Risk-On

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

Weekly:
  • The week ending on March 18 was a large Bullish Engulfing candle with almost no upper shadow and a small lower shadow;
    • Stochastic (9,1, 3): %K crossed above %D from below 30;
    • RSI-9 bounced up above 50 from just above 30
  • The week up +258.81 or +6.2%; the 5-week ATR  is 208.99
  • An up week; second in the last five weeks, and fourth in the previous ten weeks
  • The weekly pivot point=4363.41, R1=4565.11, R2=4667.09; S1=4261.43, S2=4059.73; R1/R2 pivot levels were breached
  • Above 10-week EMA; below 39-week SMA; above 89-week SMA
  • Uptrend
Daily
  • A green candle with no upper and lower shadows closing near the high of the past two days;
    • Stochastic (9, 1, 3): %K crossed above %D above 90
    • RSI-9 turned up to near 65; above 8-day EMA;
  • Above 20-day EMA, 50-day EMA, 200-day SMA; below 100-day SMA
  • In Confirmed Uptrend
2-Hour (E-mini futures)
  • Bouncing off from 4446.75, the low of 6:00 pM on March 23, to make a high since February 10; next resistance near 4580.00
    • RSI-21 moving up since 4:00 PM on AMarch 24 from near 30 to above 70
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
  • Breaking above a saucer pattern – the 61.8% extension target is near 4558.00 and the 100% extension target is near 4585.00
    • RSI-21 is moving above 60
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways to up since 9:45 PM
  • The Bollinger Band is expanding a bit since 6:45 AM; price first walked up the upper band and the moving sideways since 7:15 AM
    • Stochastic (9, 1, 3): %K is crisscrossing %D near 80;
  • Bias: Up

Previous Session

Major U.S. indices closed higher on Thursday, March 24, in mostly lower volume. Russell 2000 traded in higher volume. Major indices opened up and then mostly traded higher for the rest of the day.

From Briefing.com:

The stock market ended Thursday on a firmly higher note with the Nasdaq (+1.9%) finishing ahead of the S&P 500 (+1.4%) and Dow (+1.0%). […]

The technology sector (+2.7%) was the only group with a gain of more than 2.0% while the materials sector (+2.0%) finished just behind after outperforming throughout the day.

Crude oil, … finished today’s session with a loss of $4.02, or 3.5%, at $111.24/bbl. However, the energy sector (+0.1%) was able to eke out a slim gain, extending this week’s advance to 5.0%.

The consumer discretionary sector (+0.7%) finished near the bottom of today’s leaderboard

[…]

The 30-yr bond turned positive in the afternoon, sending its yield lower by a basis point to 2.51% while the 10-yr note finished with a modest loss, lifting its yield by two basis points to 2.34%.

[…]
  • Initial jobless claims for the week ending March 19 decreased by 28,000 to 187,000 (Briefing.com consensus 210,000), which is the lowest level since September 6, 1969. Continuing jobless claims for the week ending March 12 decreased by 67,000 to 1.350 million, which is the lowest level since January 3, 1970.
  • […]
  • Durable goods orders for February declined 2.2% month-over-month (Briefing.com consensus -0.5%) after increasing 1.6% in January. Excluding transportation, durable goods orders fell 0.6% month-over-month (Briefing.com consensus +0.5%) after increasing 0.8% in January.
  • […]
  • The IHS Markit Manufacturing PMI increased to 58.5 in the preliminary reading for March from February’s final reading of 57.3.
  • The IHS Markit Services PMI increased to 58.9 in the preliminary reading for March from February’s final reading of 56.5.
  • The Current Account deficit narrowed to $217.90 bln in Q4 from a revised deficit of $219.90 bln (from -$214.80 bln) in Q3.
[…]
  • Dow Jones Industrial Average -4.5% YTD
  • S&P 500 -5.2% YTD
  • Russell 2000 -7.6% YTD
  • Nasdaq Composite -9.3% YTD

Overseas: 

  • Europe: DAX -0.1%, FTSE +0.1%, CAC -0.4%
  • Asia: Nikkei +0.3%, Hang Seng -0.9%, Shanghai -0.6%

Commodities: 

  • Crude Oil -4.02@ 111.24
  • Nat Gas +0.17 @ 5.45
  • Gold +27.50 @ 1963.80
  • Silver +0.68 @ 25.84
  • Copper -0.06 @ 4.72
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