Market Remarks

Morning Notes – Thursday, April 14, 2022

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are a lower at 8:45 AM; moving down since 1:30 AM; broke below a sideways move from 3:15 AM to 8:30 AM from around 4440.00 level
  • The odds are for a down day with elevated volatility – watch for a break above 4442.00 for a change of sentiments
  • Key economic data report due during the day:
    • Retail Sales ( 0.5% vs. 0.6% est.; prev. 0.8%) at 8:30 AM
    • Core Retail Sales ( 1.1% vs. 1.0% est.; prev. 0.6%) at 8:30 AM
    • Unemployment Claims ( 185K vs. 172K est.; prev. 167K) at 8:30 AM
    • Import Prices ( 2.6% vs. 2.3% est.; prev. 1.6%) at 8:30 AM
    • Prelim UoM Consumer Sentiment ( 59.1 est.; prev. 59.4) at 10:00 AM
    • Prelim UoM Inflation Expectations ( prev. 5.4%) at 10:00 AM
    • Business Inventories( 11.3% est.; prev. 1.1%) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4421.59, 4397.02, and 4381.78
  • Critical resistance levels for S&P 500 are 4453.92, 4459.13, and 4471.00
  • Key levels for E-mini futures: break above 4442.00, the high at 8:00 AM and a break below 4423.75, the low at 1:45 PM on Wednesday

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (June 2022) closed at 4442.50 and the index closed at 4446.59 – a spread of about -4.00 points; futures closed at 4442.25 for the day; the fair value is +0.25
  • Pre-NYSE session open, futures are mixed – at 8:30 AM, S&P 500 futures were down by -7.75; Dow up by +12; and NASDAQ down by -25.75

Markets Around The World

  • Markets in the East closed mostly higher – Singapore closed lower; Mumbai was closed
  • European markets are 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 2.703%, up +34.5 basis points from two weeks ago;
    • 30-years is at 2.820%, up +34.0 basis points;
    • 2-years yield is at 2.353%, up +4.3 basis points;
    • The 10-Year-&-2-Year spread is at 0.350, up from 0.048
    • The 30-Year-&-10-Year spread is at 0.117, down from 0.122
  • VIX
    • At 21.72 @ 8:00 AM; down 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-On

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 Bullish Engulfing candle with almost no lower shadow and a small upper shadow;
    • Stochastic (9, 1, 3): %K crossed above %D from below 10
    • RSI-9 turned up from 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 – almost touched the 100% extension target is around 4369.00; moving sideways since 10: AM on April 11
    • RSI-21 is moving up since 10:00 PM on April 11; above 55
    • Above EMA20 but below EMA10 of EMA50
  • Bias: Down-Side
30-Minute (E-mini futures)
  • Moving up since 9:00 AM on April 13; moving sideways since 3:00 PM
    • RSI-21 drifted down to just above 50 from near 65
    • Below EMA20 but above EMA10 of EMA50
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is moving sideways to down since 1:45 AM
  • The Bollinger Band is contracting a bit since 7:30 AM
  • Bias: Side

Previous Session

Major U.S. indices closed higher on Wednesday, April 13, in mostly lower volume. Dow Jones Transportation Average traded in higher volume.

The major indices opened up and then traded higher for the rest of the day. Mst made Bullish Engulfing or similar bullish candlestick formations.

From Briefing.com:

The S&P 500 rose 1.1% on Wednesday in a relatively broad-based advance led by the growth stocks. The Dow Jones Industrial Average (+1.0%) rose comparably, while the Nasdaq Composite (+2.0%) and Russell 2000 (+1.9%) outperformed with roughly 2% gains. […]

The S&P 500 reclaimed its 50-day moving average (4422) on a closing basis amid gains in nine of its 11 sectors. Six sectors advanced at least 1.0%, including a 2.5% gain for the consumer discretionary sector (+2.5%).

[…]

Conversely, the financials (-0.1%) and utilities (-0.2%) sectors closed lower,

[…]

The 2-yr yield decreased five basis points to 2.34%, and the 10-yr yield decreased four basis points to 2.69%. The U.S. Dollar Index fell 0.4% to 99.88.

[…]

WTI crude futures, meanwhile, flirted with $105 per barrel ($104.25, +3.56, +3.5%) despite bearish inventory data from the EIA and a downwardly revised 2022 global demand growth forecast from the IEA.

[…]
  • The Producer Price Index for final demand jumped 1.4% month-over-month in March (Briefing.com consensus 1.2%) following an upwardly revised 0.9% increase (from 0.8%) in February. The index for final demand, less foods and energy, rose 1.0% month-over-month (Briefing.com consensus 0.5%) following an upwardly revised 0.4% increase (from 0.2%) in February. On a year-over-year basis, the index for final demand was up 11.2% while the index for final demand, less foods and energy, was up 9.2%. The accompanying tables for the report show a lengthy list of double-digit percentage increases on a year-over-year basis for many categories.
  • […]
  • The weekly MBA Mortgage Applications Index decreased 1.3% following a 6.3% decline in the prior week.
  • Weekly crude oil inventories increased by 9.38 mln barrels after increasing by 2.42 mln barrels during the previous week.
[…]
  • Dow Jones Industrial Average -4.9% YTD
  • S&P 500 -6.7% YTD
  • Russell 2000 -9.8% YTD
  • Nasdaq Composite -12.8% YTD

Overseas: 

  • Europe: DAX -0.3%, FTSE +0.1%, CAC +0.1%
  • Asia: Nikkei +1.9%, Hang Seng +0.3%, Shanghai -0.8%

Commodities: 

  • Crude Oil +3.56 @ 104.25
  • Nat Gas +0.36 @ 7.00
  • Gold +14.80 @ 1985.00
  • Silver +0.43 @ 25.96
  • Copper +0.02 @ 4.70
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