Market Remarks

Morning Notes – Tuesday, April 5, 2022

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower at 8:15 AM; moving down since 3:30 Am from a high of 4587.25;
  • The odds are for a down day – watch for a break above 4587.25 for a change of sentiments
  • Key economic data report due during the day:
    • Final Services PMI ( 58.9 est.; prev. 58.9) at 9:45 AM
    • ISM Service PMI ( 58.6 est.; 56.5) at 10:00 AM
    • Fed Governor Brainard Speaks at 10:05 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4563.27, 4539.67, and 4519.64
  • Critical resistance levels for S&P 500 are 4583.50, 4603.07, and 4617.01
  • Key levels for E-mini futures: break above 4587.25, the high of 3:30 AM and break below 4563.00, the low of 6:30 AM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (June 2022) closed at 4578.00 and the index closed at 4582.64 – a spread of about -4.75 points; futures closed at 4577.75 for the day; the fair value is +0.25
  • Pre-NYSE session open, futures are lower – at 8:00 AM, S&P 500 futures were down by -7.75; Dow by -66; and NASDAQ by -29.00

Markets Around The World

  • Markets in the East closed mostly higher – Mumbai closed down; Shanghai  and Hong Kong were closed;
  • European markets are mostly lower – Spain and STOXX 600 are higher
  • Currencies (Compared to two weeks ago):
    Up Down
    • Dollar index
    • USD/JPY
    • AUD/USD
    • NZD/USD
    • EUR/USD
    • GBP/USD
    • USD/CHF
    • USD/CAD
    • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • Precious metals are mixed
    • Industrial metals are mostly lower
    • Soft commodities are mixed
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 2.412%, up +9.7 basis points from two weeks ago;
    • 30-years is at 2.474%, down -6.0 basis points;
    • 2-years yield is at 2.432%, up +30.8 basis points;
    • The 10-Year-&-2-Year spread is at -0.020, down from 0.191
    • The 30-Year-&-10-Year spread is at 0.062, down from 0.219
  • VIX
    • At 19.12 @ 7:45 AM; up from the last close; below the 5-day SMA;
    • Recent high = 33.83 on March 15; low = 18.67 on MArch 29
    • Sentiment: Risk-Off

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

Weekly:
  • The week ending on April 1 was a Doji candle;
    • Stochastic (9,1, 3): %K turned down but is still above %D; near 90
    • RSI-9 is above 50
  • The week was up +2.80 or +0.1%; the 5-week ATR  is 172.68
  • An up week; third in the last five weeks, and sixth in the previous ten weeks
  • The weekly pivot point=4563.58, R1=4619.58, R2=4693.31; S1=4489.85, S2=4433.85; R1/R2 pivot levels were breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend
Daily
  • A green candle with almost no upper shadow and a small lower shadow; forming a three-day Morning Star  pattern
    • Stochastic (9, 1, 3): %K crossed above %D; just below 70
    • RSI-9 turned above 60; below 8-day EMA;
  • Above 20-day EMA, 50-day EMA, 200-day SMA, and 100-day SMA;
  • In Confirmed Uptrend
2-Hour (E-mini futures)
  • Moving up since 12:00 PM on April 1 following a brief retreat from a high of 4631.00 at 2:00 PM on March 26; uptrend since 4:00 PM on March 15
    • RSI-21 rising since 2:00 PM on March 31
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving up since 1:00 PM on April 1
    • RSI-21 is around 50
    • Below EMA20 but above EMA10 of EMA50
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is drifting sideways to down since 7:00 PM
  • The Bollinger Band is expanding since 3:45 AM with price walking down the lower band
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mostly higher on Monday, April 4, in lower volume. Dow Jones Transportation Average closed lower. Major indices mostly opened up and then traded higher for the rest of the day.

From Briefing.com:

The S&P 500 rose 0.8% on Monday, as money flowed back into the mega-caps/growth stocks, which accounted for the outperformance of the Nasdaq Composite (+1.9%). The Dow Jones Industrial Average (+0.3%) and Russell 2000 (+0.2%) rose more modestly. […]

The S&P 500 information technology (+1.9%), consumer discretionary (+2.3%), and communication services (+2.3%) sectors, which contain the mega-caps, each rose about 2%. The energy sector (+0.1%) eked out a gain, while the other sectors closed lower with utilities (-0.8%) finishing in last place.

[…]

The 10-yr yield increased three basis points to 2.41% while the 2-yr yield decreased one basis point to 2.42% — narrowing the inversion to one basis point. The U.S. Dollar Index increased 0.4% to 99.01.

[…]
  • Factory orders for manufactured goods declined 0.5% m/m in February (Briefing.com consensus -0.6%) following an upwardly revised 1.5% increase (from +1.4%) in January. Shipments of manufactured goods jumped 0.6% after increasing 1.4% in January.
[…]
  • Dow Jones Industrial Average -3.9% YTD
  • S&P 500 -3.9% YTD
  • Russell 2000 -6.7% YTD
  • Nasdaq Composite -7.1% YTD

Overseas: 

  • Europe: DAX +0.5%, FTSE +0.3%, CAC +0.7%
  • Asia: Nikkei +0.3%, Hang Seng +2.1%, Shanghai market closed

Commodities: 

  • Crude Oil +3.80 @ 103.34
  • Nat Gas -0.01 @ 5.71
  • Gold +11.50 @ 1937.10
  • Silver -0.04 @ 24.60
  • Copper +0.09 @ 4.78
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