Market Remarks

Morning Notes – Monday, April 11, 2022

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are a lower at 8:45 AM; down 30-points since 3:30 AM
  • The odds are for a down day with elevated volatility – watch for a break above 4473.50 for a change of sentiments
  • No key economic data report due during the day

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4450.30, 4437.84, and 4424.30
  • Critical resistance levels for S&P 500 are 4474.60, 4481.80, and 4502.29
  • Key levels for E-mini futures: break above 4473.50, the high at 6:00 AM, and a break below 4446.50, the low at 8:00 AM

Pre-Open

  • On Friday at 4:00 PM, S&P futures (June 2022) closed at 4487.00 and the index closed at 4488.28 – a spread of about -1.25 points; futures closed at 4483.50 for the day; the fair value is +3.50
  • Pre-NYSE session open, futures are lower – at 8:30 AM, S&P 500 futures were down by -35.75; Dow by -155; and NASDAQ by -180.50

Markets Around The World

  • Markets in the East closed mostly lower – Sydney closed higher
  • European markets are mostly lower – France is 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 mostly higher
    • Soft commodities are mixed
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 2.753%, up +26.1 basis points from two weeks ago;
    • 30-years is at 2.771%, up +16.8 basis points;
    • 2-years yield is at 2.466%, up +118.6 basis points;
    • The 10-Year-&-2-Year spread is at 0.287, up from 0.212
    • The 30-Year-&-10-Year spread is at 0.018, down from 0.111
  • VIX
    • At 22.73 @ 7:45 AM; up 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 8 was a Spinning Top Bearish Engulfing candle;
    • Stochastic (9,1, 3): %K crossed below %D; near 80
    • RSI-9 is just above 50
  • The week was down -57.58 or -1.3%; the 5-week ATR  is 173.91
  • A down week; second in the last five weeks, and sixth in the previous ten weeks
  • The weekly pivot point=4510.59, R1=4571.14, R2=4654.00; S1=4427.73, S2=4367.18; S1 pivot level was breached
  • Above 10-week EMA, 39-week SMA, and 89-week SMA
  • Uptrend Under Pressure
Daily
  • A red Haram Doji following a Spinning Top Bullish Engulfing candle at 200-d SAM
    • 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;
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Declining since 4:00 AM on Frida; near a support level around 4444.00 – a break below will have a 61.8% extension target around 4398.00 and the 100% extension target around 4369.00
    • RSI-21 is moving lower; just above 30
    • Below EMA20, which is below EMA10 of EMA50
  • Bias: Side-Down
30-Minute (E-mini futures)
  • A Descending Triangle is emerging with price near the lower bound;
    • RSI-21 is moving between 40 and 50
    • Below EMA20, which is below EMA10 of EMA50
  • Bias: Side-Down
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways since 3:45 AM after moving down from 11:15 AM on Friday
  • The Bollinger Band is flattening but relatively large with price at the lower band
  • Bias: Down-Side

Previous Session

Major U.S. indices closed mostly lower on Friday, April 8, in mostly lower volume. Dow Jones Industrial Average and NYSE Composite closed higher. S&P 500 traded in higher volume.

For the week, the major indices closed down in mixed volume. Markets in Asia mostly decline but European markets were mixed. The dollar index was up. The energy futures were mixed but most soft and hard commodities closed up. The US Treasury yields were up. 

From Briefing.com:

The S&P 500 declined 0.3% on Friday in a mixed session in which value stocks outperformed at the expense of growth stocks. The growth/value divide was evident in the disparity between the Nasdaq Composite (-1.3%) and Dow Jones Industrial Average (+0.4%). The Russell 2000 lost 0.8%. […]

The mega-caps within the S&P 500 information technology (-1.4%), consumer discretionary (-1.0%), and communication services (-0.7%) sectors were among the heaviest weights on the market. The Vanguard Mega Cap Growth ETF (MGK 227.74, -2.78) fell 1.2%.

[…]

Conversely, the financials (+1.0%) and energy (+2.8%) sectors were the strongest performers amid the higher rates and higher oil prices ($98.18/bbl, +1.88, +2.0%). The defensive-oriented health care (+0.6%), consumer staples (+0.4%), utilities (+0.3%), and real estate (+0.3%) sectors added to their weekly gains.

[…]

The U.S. Dollar Index (99.84, +0.09, +0.1%), meanwhile, rose for the seventh straight session and briefly topped the 100.00 level.

[…]
  • Dow Jones Industrial Average -4.5% YTD
  • S&P 500 -5.8% YTD
  • Russell 2000 -11.2% YTD
  • Nasdaq Composite -12.4% YTD
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