Market Remarks

Morning Notes – Friday, April 8, 2022

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are a lower at 8:45 AM; moving down since 4:15 AM after making a Double Top at 4519.75 – a break below 4491,75 will complete the pattern
  • The odds are for a down day with elevated volatility – watch for a break above 4515.00 and a break below 4491.75
  • Key economic data report due during the day:
    • Final Wholesale Inventories (2.1% est.; prev. 2.1% ) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4498.84, 4483.94, and 4456.37
  • Critical resistance levels for S&P 500 are 4521.16, 4446.59, and 4561.49
  • Key levels for E-mini futures: break above 4515.00, the high at 7:30 AM, and a break below 4491.75, the low at 12:30 AM

Pre-Open

  • On Thursday at 4:00 PM, S&P futures (June 2022) closed at 4497.50 and the index closed at 4500.21 – a spread of about -25.75 points; futures closed at 4496.25 for the day; the fair value is +1.25
  • Pre-NYSE session open, futures are mixed – at 8:30 AM, S&P 500 futures were up by +4.75; Dow up by +89; and NASDAQ down by -6.50

Markets Around The World

  • Markets in the East closed mostly higher – Singapore closed lower
  • European markets are higher
  • Currencies (Compared to two weeks ago):
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
    • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • Precious metals are lower
    • Industrial metals are lower
    • Soft commodities are mixed
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 2.710%, up +36.9 basis points from two weeks ago;
    • 30-years is at 2.724%, up +21.3 basis points;
    • 2-years yield is at 2.510%, up +37.5 basis points;
    • The 10-Year-&-2-Year spread is at 0.191, down from 0.206
    • The 30-Year-&-10-Year spread is at 0.014, down from 0.170
  • VIX
    • At 21.55 @ 8:45 AM; unchange from the last close; above the 5-day SMA;
    • Recent high = 24.78 on April 6; low = 18.45 on April 4
    • 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 Spinning Top Bullish Engulfing candle at 200-Day SMA
    • Stochastic (9, 1, 3): %K crossed above %D; from below 20
    • RSI-9 moved below 50; below 8-day EMA;
  • Above 20-day EMA and above 50-day EMA; at/above 200-day SMA; below 100-day SMA;
  • In Confirmed Uptrend
2-Hour (E-mini futures)
  • Bouncing up since 12:00 PM on Thursday after making a Double Bottom – the 61.8% extension target is near 4533.00 and the 100% extension target is near 4554.00
    • RSI-21 is moving above 50
    • At/below EMA10 of EMA50 but above EM20
  • Bias: Down-Side
30-Minute (E-mini futures)
  • Trending down since 3:30 PM on March 29; broke above a trading range between 4499.50 and 4444.00
    • RSI-21 is moving just above 50
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side-Up
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways since 4:45 AM
  • The Bollinger Band is flattening and contracting a bit since 6:00 AM
  • Bias: Up-Side

Previous Session

Major U.S. indices closed mostly higher on Thursday, April 7, in lower volume. Russell 2000 closed down. Major indices declined after the first half-hour of trading but turned around in the afternoon session and closed near the highs for the day. Many made Bullish Engulfing Spinning Top candles.

From Briefing.com:

The S&P 500 increased 0.4% on Thursday, overcoming a 0.7% intraday decline on no specific news catalysts. The Nasdaq Composite (+0.1%) and Dow Jones Industrial Average (+0.3%) also recouped intraday losses while the Russell 2000 (-0.4%) still closed lower despite a recovery effort. […]

The S&P 500 reclaimed its 200-day moving average on a closing basis with the help of seven of its 11 sectors. The health care (+1.9%), energy (+1.4%), and consumer staples (+1.2%) sectors led the advance with gains over 1.0%.

Conversely, the real estate (-0.9%), communication services (-0.7%), utilities (-0.3%), and financials (-0.1%) sectors closed lower.

[…]

Back in the Treasury market, the 2s10s spread increased to 19 basis points from 12 basis points yesterday. The 2-yr yield decreased two basis points to 2.47% while the 10-yr yield, as noted above, settled at 2.66%. The U.S. Dollar Index increased 0.2% to 99.79. WTI crude futures fell 0.3%, or $0.29, to $96.30/bbl.

[…]
  • Initial claims for the week ending April 2 dropped by 5,000 to 166,000 (Briefing.com consensus 200,000). Continuing claims for the week ending March 26 increased by 17,000 to 1.523 million.
  • […]
  • Consumer credit increased by $41.8 billion in February (Briefing.com consensus $15.5 billion). The prior month saw an upward revision to $8.9 bln from $6.8 bln.
[…]
  • Dow Jones Industrial Average -4.8% YTD
  • S&P 500 -5.6% YTD
  • Russell 2000 -10.5% YTD
  • Nasdaq Composite -11.2% YTD

Overseas: 

  • Europe: DAX -0.5%, FTSE -0.5%, CAC -0.6%
  • Asia: Nikkei -1.7%, Hang Seng -1.2%, Shanghai -1.4%

Commodities: 

  • Crude Oil -0.29 @ 96.30
  • Nat Gas +0.33 @ 6.39
  • Gold +17.00 @ 1937.90
  • Silver +0.32 @ 24.65
  • Copper +0.00 @ 4.70
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