Market Remarks

Morning Notes – Wednesday, March 30, 2022

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower at 8:15 AM; moving lower since 2:00 AM
  • The odds are for a down day – watch for a break above  4627.50 for a change of sentiments
  • Key economic data report due during the day:
    • ADP Non-Farm Employment Change ( 455K est.; prev. 475K) at 8:15 AM
    • Final GDP ( 7.0% est.; prev. 7.0% ) at 8:30 AM
    • Final GDP Price Index ( 7.1% est.; prev. 7.1%) at 8:30 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4608.19, 4589.66, and 4575.65
  • Critical resistance levels for S&P 500 are 4637.30, 4665.13, and 4685.18
  • Key levels for E-mini futures: break above 4627.50, the high of 2:00 AM and break below 4604.75, the low of 4:45 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (June 2022) closed at 4627.00 and the index closed at 4631.60 – a spread of about -4.50 points; futures closed at 4625.50 for the day; the fair value is +1.50
  • Pre-NYSE session open, futures are lower – at 7:45 AM, S&P 500 futures were down by -10.25; Dow by -82; and NASDAQ by -49.75

Markets Around The World

  • Markets in the East closed mostly higher – Tokyo closed lower;
  • European markets are lower
  • 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 lower
    • Industrial metals are mostly lower
    • Soft commodities are mixed
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 2.400%, up +24.0 basis points from two weeks ago;
    • 30-years is at 2.524%, up +1.9 basis points;
    • 2-years yield is at 2.374%, up +50.7 basis points;
    • The 10-Year-&-2-Year spread is at 0.026, down from 0.293
    • The 30-Year-&-10-Year spread is at 0.124, down from 0.345
  • VIX
    • At 19.71 @ 6:30 AM; up from the last close; below the 5-day SMA;
    • Recent high = 33.83 on March 15; low = 17.36 on January 9
    • Sentiment: Risk-Off

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 that gapped up with a small lower shadow and a smaller upper shadow;
    • Stochastic (9, 1, 3): %K crossed below %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; drifting sideways to down from 4630.00;
    • RSI-21 declined from above 80 to 60
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
  • Moving sideways to down since 3;00 PM on Tuesday; broke above a saucer pattern on Friday – the 161.8% extension target near 4628.00 is achieved
    • RSI-21 declined to 5o from above 70 and after making a Bearish Divergence
    • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways to down since 8:15 PM
  • The Bollinger Band is contracting a bit since 7:15 AM with price bouncing up to the middle band from the lower band
    • Stochastic (9, 1, 3): %K is above %D above 80;
  • Bias: Up-Side

Previous Session

Major U.S. indices closed higher on Tuesday, March 29, in higher volume. Major indices gapped up at the open and then trading sideways for some time moved higher in the afternoon.

From Briefing.com:

The S&P 500 rose 1.2% on Tuesday, as reported progress in peace talks helped keep the positive momentum intact despite a key inversion in the Treasury market. The Nasdaq Composite (+1.8%) and Russell 2000 (+2.7%) outperformed the benchmark index while the Dow Jones Industrial Average rose 1.0%. […]

The heavily-weighted information technology (+2.1%) and consumer discretionary (+1.5%) sectors were among the top performers behind the real estate sector (+2.9%), while the energy sector (-0.4%) bucked the positive trend amid a decline in oil prices ($104.33, -2.14, -2.0%).

[…]

Elsewhere, a widely-followed recession indicator in the Treasury market briefly flashed red for the first time since 2019. Specifically, the 2-yr yield (+1 bps to 2.35%) briefly traded higher than the 10-yr yield (-8 bps to 2.40%), which is typically viewed as a harbinger for a recession between 6-24 months after the inversion.

[…]
  • The Conference Board’s Consumer Confidence Index rose to 107.2 in March (Briefing.com consensus 107.5) from a downwardly revised 105.7 (from 110.5) in February. In the same period a year ago, the index stood at 109.0.
  • […]
  • Job openings decreased to 11.266 million in February from a revised 11.283 million (from 11.263 million) in January.
  • The FHFA Housing Price Index for February increased 1.6% m/m (Briefing.com consensus 1.3%), and the S&P Case-Shiller Home Price Index for February increased 19.1% yr/yr (Briefing.com consensus 18.7%).
[…]
  • S&P 500 -2.8% YTD
  • Dow Jones Industrial Average -2.9% YTD
  • Russell 2000 -5.0% YTD
  • Nasdaq Composite -6.6% YTD

Overseas: 

  • Europe: DAX +2.8%, FTSE +0.9%, CAC +3.1%
  • Asia: Nikkei +1.1%, Hang Seng +1.0%, Shanghai -0.3%

Commodities: 

  • Crude Oil -2.14 @ 104.33
  • Nat Gas -0.20 @ 5.35
  • Gold -17.80 @ 1914.40
  • Silver -0.29 @ 24.79
  • Copper +0.02 @ 4.74
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