Market Remarks

Morning Notes – Tuesday, March 29, 2022

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher at 8:30 AM; moving up since 1:00 AM
  • The odds are for an up day with a good chance of sideways to down move from the pre-open levels around 4610.00 – watch for a break below 4580.50 for a change of sentiments
  • Key economic data report due during the day:
    • HPI ( 1.2% est.; prev. 1.2%) at 9:00 AM
    • S&P/CS Composite-20 HPI ( 18.6% est.; prev. 18.6% ) at 9:00 AM
    • JOLTS Job Openings ( 11.00M est.; prev. 11.26M) at 10:00 AM
    • CB Consumer Confidence (106.9 est.; 110.5) 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

Key Levels:

  • Critical support levels for S&P 500 are 4556.07, 4538.44, and 4517.69
  • Critical resistance levels for S&P 500 are 4602.11, 4632.24, and 4665.13
  • Key levels for E-mini futures: break above 4611.25, the high of 8:15 AM and break below 4580.50, the low of 7:20 AM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (June 2022) closed at 4569.00 and the index closed at 4575.52 – a spread of about -6.50 points; futures closed at 4568.00 for the day; the fair value is +1.00
  • Pre-NYSE session open, futures are higher – at 8:15 AM, S&P 500 futures were up by +36.50; Dow by +258; and NASDAQ by +151.00

Markets Around The World

  • Markets in the East closed mostly higher – Shanghai closed lower;
  • European markets are higher
  • Currencies (Compared to two weeks ago):
    Up Down
    • Dollar index
    • EUR/USD
    • GBP/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • USD/CHF
    • USD/CAD
    • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher
    • Precious metals are lower
    • Industrial metals are mostly lower
    • Soft commodities are mostly lower
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 2.486%, up +34.6 basis points from two weeks ago;
    • 30-years is at 2.563%, up +8.7 basis points;
    • 2-years yield is at 2.379%, up +51.2 basis points;
    • The 10-Year-&-2-Year spread is at 0.107, down from 0.273
    • The 30-Year-&-10-Year spread is at 0.077, down from 0.336
  • VIX
    • At 19.32 @ 8:00 AM; down from the last close; below the 5-day SMA;
    • Recent high = 33.83 on March 15; low = 17.36 on January 9
    • Sentiment: Risk-On

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

Weekly:
  • The week ending on March 25 was a relatively small green candle with almost no upper shadow and a small lower shadow;
    • Stochastic (9,1, 3): %K is above %D; near 90
    • RSI-9 is moving above 50
  • The week was up +79.94 or +1.8%; the 5-week ATR  is 200.87
  • An up week; third in the last five weeks, and fifth in the previous ten weeks
  • The weekly pivot point=4504.46.41, R1=4584.63, R2=4626.19; S1=4462.90, S2=4382.73; No pivot levels were breached
  • Above 10-week EMA; below 39-week SMA; above 89-week SMA
  • Uptrend
Daily
  • A green candle with no upper shadow and a lower shadow almost equal to the real body;
    • Stochastic (9, 1, 3): %K is above %D near 100
    • RSI-9 is rising; just below 70; above 8-day EMA;
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA;
  • In Confirmed Uptrend
2-Hour (E-mini futures)
  • Trending up from 4129.50 at 4:00 PM on March 15 to near 4600.00; breaking above a resistance level around 4580.00
    • RSI-21 is near 75; breaking above the downtrend line from March 16 high
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
  • Trending higher; broke above a saucer pattern on Friday – the 100% extension target near 4585.00 is achieved and the 161.8% extension target is near 4628.00
    • RSI-21 is moving up near 70
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving to up since 1:15 AM
  • The Bollinger Band is expanding a bit since 7:45 AM with price walking up the upper band
    • Stochastic (9, 1, 3): %K is above %D near 80;
  • Bias: Up

Previous Session

Major U.S. indices closed higher on Monday, March 28, in mostly lower volume. Dow Jones Industrial Average traded in higher volume. Major indices opened lower and then traded down before turning around at mid-day and trading higher for the rest of the day.

From Briefing.com:

The S&P 500 gained 0.7% on Monday, as positive momentum and a hopeful-sounding geopolitical headline helped outweigh growth concerns. The Nasdaq Composite rose 1.3% while the Dow Jones Industrial Average rose 0.3%. The small-cap Russell 2000 (unch) finished flat.

Eight of the 11 S&P 500 sectors closed higher, led by the consumer discretionary (+2.7%), information technology (+1.2%), and real estate (+1.3%) sectors. The energy (-2.6%), materials (-0.5%), and financials (-0.3%) sectors closed lower.

[…]

The cyclical sectors (except for the consumer discretionary sector) still underperformed, WTI crude futures still fell 6.5%, or $7.36, to $106.47/bbl, and the Treasury yield curve still flattened.

The 2-yr yield rose five basis points to 2.34%, while the 10-yr yield decreased two basis points to 2.48%.

[…]

The U.S. Dollar Index increased 0.4% to 99.14 amid relative weakness in the British pound (-0.7%) and Japanese yen (-1.5%).

[…]
  • The Advance report for International Trade in Goods for February showed a deficit of $106.6 billion, versus an unrevised $107.6 billion in January. The Advance report for Retail Inventories for February rose 1.1%, while the Advance report for Wholesale Inventories for February rose 2.1%.
[…]
  • Dow Jones Industrial Average -3.8% YTD
  • S&P 500 -4.0% YTD
  • Russell 2000 -7.5% YTD
  • Nasdaq Composite -8.3% YTD

Overseas: 

  • Europe: DAX +0.8%, FTSE -0.1%, CAC +0.5%
  • Asia: Nikkei -0.7%, Hang Seng +1.3%, Shanghai +0.1%

Commodities: 

  • Crude Oil -7.36 @ 106.47
  • Nat Gas -0.05 @ 5.55
  • Gold -20.70 @ 1932.20
  • Silver -0.47 @ 25.08
  • Copper +0.03 @ 4.72
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