Morning Notes – Thursday, March 31, 2022

/ March 31, 2022

Directional Bias For The Day:

  • S&P Futures are a bit higher at 8:0 AM; drifting lower since 8:30 PM
  • The odds are for a down day – watch for a break above 4612.00 for a change of sentiments
  • Key economic data report due during the day:
    • Core PCE Price Index (0.4% est.; prev. 0.5%) at 8:30 AM
    • Unemployment Claims ( 195K est.; prev. 187K) at 8:30 AM
    • Personal Income ( 0.5% est.; prev. 0.0% ) at 8:30 AM
    • Personal Spending ( 0.5% est.; prev. 2.1%) at 8:30 AM
    • Chicago PMI ( 56.9 est.; prev. 56.3) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4581.32, 4575.65, and 4556.07
  • Critical resistance levels for S&P 500 are 4602.66, 4610.20, and 4637.30
  • Key levels for E-mini futures: break above 4612.50, the high of 3:00 AM and break below 4574.75, the low of 3:00 PM

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (June 2022) closed at 4598.00 and the index closed at 4602.45 – a spread of about -4.50 points; futures closed at 4596.00 for the day; the fair value is +2.00
  • Pre-NYSE session open, futures are mixed – at 8:00 AM, S&P 500 futures were up by +1.25; Dow down by -13; and NASDAQ up by +44.50

Markets Around The World

  • Markets in the East closed mostly lower – Seoul closed higher;
  • European markets are mostly lower – Switzerland is up
  • Currencies (Compared to two weeks ago):
    Up Down
    • EUR/USD
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • Dollar index
    • GBP/USD
    • USD/CHF
    • USD/CAD
    • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher
    • Precious metals are higher
    • Industrial metals are mostly lower
    • Soft commodities are mixed
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 2.358%, up +17.0 basis points from two weeks ago;
    • 30-years is at 2.480%, up +2.1 basis points;
    • 2-years yield is at 2.310%, up +35.6 basis points;
    • The 10-Year-&-2-Year spread is at 0.048, down from 0.234
    • The 30-Year-&-10-Year spread is at 0.122, down from 0.271
  • VIX
    • At 19.99 @ 6:15 AM; up from the last close; above 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 red candle with almost no upper shadow and a small lower shadow;
    • Stochastic (9, 1, 3): %K is below %D from 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 since 2:00 PM on March 26 from 4631.00;
    • RSI-21 declined from above 80 to just above 40
    • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Up
30-Minute (E-mini futures)
  • Moving sideways to down since 3:30 PM on March 29; broke above a saucer pattern on Friday – the 161.8% extension target near 4628.00 is achieved
    • RSI-21 declined to just above 40 from above 70 and after making a Bearish Divergence
    • Below EMA20, which is at/below 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 on Tuesday
  • The Bollinger Band is expanding a bit since 6:30 AM with price walking down the lower band
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mostly lower on Wednesday, March 30, in mostly lower volume. Major indices opened lower and then drifted down for the rest of the day.

From Briefing.com:

The S&P 500 fell 0.6% on Wednesday, as the market was pressured by profit-taking interest amid tempered hopes for a timely Russia-Ukraine ceasefire. The Nasdaq Composite (-1.2%) and Russell 2000 (-2.0%) posted steeper declines while the Dow Jones Industrial Average declined just 0.2%.

[…]

Losses were concentrated in the S&P 500 information technology (-1.4%), consumer discretionary (-1.5%), and financials (-0.7%) sectors. Conversely, the energy (+1.2%), utilities (+0.8%), health care (+0.2%), and consumer staples (+0.2%) sectors closed in positive territory.

[…]

The 2-yr yield decreased two basis points to 2.33%, and the 10-yr yield decreased four basis points to 2.36%. The U.S. Dollar Index fell 0.6% to 97.85 amid relative strength in the euro (+0.6%) and yen (+0.9%).

[…]
  • The third estimate of Q4 GDP showed a downward revision to 6.9% (Briefing.com consensus 7.1%) from the second estimate of 7.0%. The GDP Price Deflator was left unrevised at 7.1% (Briefing.com consensus 7.1%).
  • […]
  • The ADP Employment Change report estimated that 455,000 jobs were added to private sector payrolls in March (Briefing.com consensus 440,000). The increase in February was upwardly revised to 486,000 from 475,000.
  • The weekly MBA Mortgage Applications Index fell 6.8% following an 8.1% decline in the prior week.
[…]
  • S&P 500 -3.4% YTD
  • Dow Jones Industrial Average -3.1% YTD
  • Russell 2000 -6.9% YTD
  • Nasdaq Composite -7.7% YTD

Overseas: 

  • Europe: DAX -1.5%, FTSE +0.6%, CAC -0.7%
  • Asia: Nikkei -0.8%, Hang Seng +1.4%, Shanghai +2.0%

Commodities: 

  • Crude Oil +3.34 @ 107.67
  • Nat Gas +0.23 @ 5.58
  • Gold +22.50 @ 1936.90
  • Silver +0.20 @ 24.99
  • Copper +0.00 @ 4.74
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