Market Remarks

Morning Notes – Wednesday, April 13, 2022

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are a lower at 8:45 AM; down more than 30 points from the 7:15 AM high of 4421.75
  • The odds are for a down day with elevated volatility – watch for a break above 4403.75 for a change of sentiments
  • Key economic data report due during the day:
    • PPI ( 1.4% vs. 1.1% est.; prev. 0.8%) at 8:30 AM
    • Core PPI ( 1.0% vs. 0.5% est.; prev. 0.2%) at 8:30 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4381.34, 4343.98, and 4322.57
  • Critical resistance levels for S&P 500 are 4403.59, 4416.95, and 4439.88
  • Key levels for E-mini futures: break above 4421.5, the high at 7:00 AM and a break below 4485.50, the low at 8:30 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (June 2022) closed at 4391.25 and the index closed at 4397.45 – a spread of about -6.25 points; futures closed at 4393.00 for the day; the fair value is -1.75
  • Pre-NYSE session open, futures are mixed – at 8:30 AM, S&P 500 futures were down by -0.75; Dow down by -38; and NASDAQ up by +17.50

Markets Around The World

  • Markets in the East closed mostly higher – Shanghai and Mumbai closed lower
  • European markets are mostly lower – Spain is higher
  • Currencies (Compared to two weeks ago):
    Up Down
    • Dollar index
    • USD/JPY
    • USD/CHF
    • USD/CAD
    • INR/USD
    • EUR/USD
    • GBP/USD
    • AUD/USD
    • NZD/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • Precious metals are higher
    • Industrial metals are mostly lower
    • Soft commodities are mostly higher
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 2.737%, up +33.7 basis points from two weeks ago;
    • 30-years is at 2.835%, up +31.1 basis points;
    • 2-years yield is at 2.414%, up +3.9 basis points;
    • The 10-Year-&-2-Year spread is at 0.323, up from 0.025
    • The 30-Year-&-10-Year spread is at 0.098, down from 0.124
  • VIX
    • At 24.30 @ 8:30 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-Neutral-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 Spinning Top candle;
    • Stochastic (9, 1, 3): %K is below %D; below 10
    • RSI-9 is below 40; below 8-day EMA;
  • Below 20-day EMA, 50-day EMA, 200-day SMA, and 100-day SMA;
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Downtrend since 12:00 AM on March 30 – lower high and lower lows; broke below a support level around 4444.00 – the 61.8% extension target around 4398.00 is achieved and the 100% extension target is around 4369.00;
    • RSI-21 is just above 40
    • Below EMA20, which is below EMA10 of EMA50
  • Bias: Down
30-Minute (E-mini futures)
  • Moving sideways to down since e1:30 AM just below a Horizontal Channel that was broken on Monday;
    • RSI-21 is moving between 40 and 50
    • Below EMA20, which is below EMA10 of EMA50
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is pointing up since 7:30 PM
  • The Bollinger Band is expanding since 7:30 AM with price walking down the lower band
  • Bias: Down-Side

Previous Session

Major U.S. indices closed mostly lower on Tuesday, April 12, in mixed volume. Russell 2000 and Dow Jones Transportation Average closed higher. Dow Transports and the NASDAQ Composite traded in higher volume.

The major indices opened higher and then traded higher but turned around after the first half-hour of trading. They traded down for the rest of the day.

From Briefing.com:

The S&P 500 declined 0.3% on Tuesday, fading an early 1.3% gain that was rooted in hopes that inflation rates could be peaking. The Nasdaq Composite (-0.3%) and Dow Jones Industrial Average (-0.3%) followed similar price action, while the Russell 2000 (+0.3%) eked out a gain.

Seven of the 11 S&P 500 sectors closed lower after each spent time in positive territory during the day. The financials (-1.1%) and health care (-1.0%) sectors declined at least 1.0%, while the energy (+1.7%), utilities (+0.4%), and consumer discretionary (+0.2%) sectors closed higher.

[…]
  • Total CPI increased 1.2% month-over-month in March, as expected, while core CPI, which excludes food and energy, increased a smaller-than-expected 0.3% (Briefing.com consensus 0.5%). That left total CPI up 8.5% year-over-year, the highest 12-month increase since December 1981, and core CPI up 6.5% year-over-year, the highest 12-month increase since August 1982.
  • […]
  • The Treasury Budget showed a $192.7 bln deficit in March versus a $659.6 bln deficit in the same period a year ago. The budget data is not seasonally adjusted, so the March deficit cannot be compared to the February deficit of $216.6 bln.
[…]
  • Dow Jones Industrial Average -5.8% YTD
  • S&P 500 -7.7% YTD
  • Russell 2000 -11.5% YTD
  • Nasdaq Composite -14.5% YTD

Overseas: 

  • Europe: DAX -0.5%, FTSE -0.6%, CAC -0.3%
  • Asia: Nikkei -1.8%, Hang Seng +0.5%, Shanghai +1.5%

Commodities: 

  • Crude Oil +6.53 @ 100.69
  • Nat Gas +0.02 @ 6.64
  • Gold +18.90 @ 1970.20
  • Silver +0.56 @ 25.53
  • Copper +0.06 @ 4.68
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