Market Remarks

Morning Notes – Thursday, April 28, 2022

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher at 9:15 AM; drifting down since 5:00; down almost 40 points
  • The odds are for an up day with a good chance of sideways to down move from pre-open levels with elevated volatility – watch for a break above 4249.25 and a break below 4200.50 for clarity
  • Key economic data report due during the day:
    • Advance GDP (-1.4% vs. 1.1% est.; prev. 6.9%) at 8:30 AM
    • Advanced GDP Price Index ( 8.0% vs. 7.2% est.; prev. 7.1) at 8:30 AM
    • Unemployment Claims ( 180K vs. 178K est; prev. 185K) at 8:30 AM

Directional Bias Before Open:

  • Weekly: Uptrend Under Pressure
  • Daily: Uptrend Under Pressure
  • 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 4199.22, 4175.70, and 4161.72
  • Critical resistance levels for S&P 500 are 4240.71, 4278.14, and 4299.02
  • Key levels for E-mini futures: break above 4249.25, the high at 7:00 AM and a break below 4200.50, the low at 9:30 PM

Pre-Open

  • On Wednesday at 4:00 PM, S&P futures (June 2022) closed at 4179.50 and the index closed at 4183.96 – a spread of about -4.50 points; futures closed at 4180.25 for the day; the fair value is -0.75
  • Pre-NYSE session open, futures are higher – at 9:15 AM, S&P 500 futures were up by +51.75; Dow by +199; and NASDAQ by +219.25

Markets Around The World

  • Markets in the East closed higher
  • 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 lower
    • Industrial metals are lower
    • Soft commodities are mostly lower
  • Treasuries (Compared to two weeks ago)
    • 10-years yield closed at 2.818%, up +13.1 basis points from two weeks ago;
    • 30-years is at 2.908%, up +11.4 basis points;
    • 2-years yield is at 2.551%, up +19.9 basis points;
    • The 10-Year-&-2-Year spread is at 0.267, down from 0.335
    • The 30-Year-&-10-Year spread is at 0.090, up from 0.107
  • VIX
    • At 30.08 @ 8:30 AM; down from the last close; at the 5-day SMA;
    • Recent high = 33.81 on April 26; low = 19.75 on April 20
    • Sentiment: Risk-Neutral-Off

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

Weekly:
  • The week ending on April 22 was a red candle with a large upper shadow and almost no lower shadow; the high of the week was above the high of the previous week;’s candle
    • Stochastic (9,1, 3): %K is below %D; near 30
    • RSI-9 is below 40
  • The week was down -120.81 or -2.8%; the 5-week ATR  is 149.43
  • A down week; third in the last five weeks, and sixth in the previous ten weeks
  • The weekly pivot point=4350.78, R1=4433.94, R2=4596.10; S1=4188.62, S2=4105.46; R1/R2/S1/S2/S3 pivot levels were breached
  • Below 10-week EMA and 39-week SMA; above 89-week SMA
  • Uptrend Under Pressure
Daily
  • A Harami Doji with an upper shadow a bit larger than the lower shadow
    • Stochastic (9, 1, 3): %K is below %D; turning up from near zero
    • RSI-9 is below 40; at/below 8-day EMA;
  • Below 50-day EMA, 20-day EMA, 200-day SMA, and 100-day SMA;
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • The downtrend since 12:00 AM on March 30; lower highs and lower lows since April 21; bouncing off  from a low of 4136.75 at 4:00 PM on April 26
    • RSI-21 has risen above 50 from below 20
    • Above EMA20 but below EMA10 of EMA50
  • Bias: Down-Side
30-Minute (E-mini futures)
  • Drifting up since 4:30 PM on April 26 within a downtrend that at 9:30 AM on April 21
    • RSI-21 moving above 50
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is drifting up since 9:30 PM on April 26; a bearish down-sloping flag is forming
  • The Bollinger Band is relatively expanded
  • Bias: Down-Side

Previous Session

Major U.S. indices closed mostly higher on Wednesday, April 27, in mostly higher volume. NASDAQ Composite and Russell 2000 closed lower. Dow Jones Transportation Average and  Russell 2000 traded in lower volume. Most major indices made Doji or similar indecisive candles.

From Briefing.com:

The S&P 500 increased 0.2% on Wednesday in a volatile session in which the benchmark index traded between a 0.3% decline and 1.6% gain. The Nasdaq Composite (unch), Dow Jones Industrial Average (+0.2%), and Russell 2000 (-0.3%) closed mixed and little changed, also fading intraday gains. […]

The S&P 500 communication services sector (-2.6%) was easily the worst-performing sector,

[…]

Conversely, the information technology (+1.4%), materials (+1.5%), and energy (+1.5%) sectors each gained roughly 1.5%.

[…]

The 2-yr yield increased two basis points to 2.57%, and the 10-yr yield increased five basis points to 2.82%. The U.S. Dollar Index rose 0.7% to 102.97. WTI crude futures rose 0.3%, or $0.33, to $101.75/bbl.

[..]
  • The Advance report for International Trade in Goods for March showed a deficit of $125.3 billion, versus a revised $106.4 billion (from $106.6 billion) in February. The Advance report for Retail Inventories for March rose 2.0%, and the Advance report for Wholesale Inventories for March rose 2.3%.
  • Pending home sales decreased 1.2% m/m in March (Briefing.com consensus -1.5%) following a revised 4.0% decline (from -4.1%) in February.
  • The weekly MBA Mortgage Applications Index fell 8.3% following a 5.0% decline in the prior week.
[…]
  • Dow Jones Industrial Average -8.4% YTD
  • S&P 500 -12.2% YTD
  • Russell 2000 -16.1% YTD
  • Nasdaq Composite -20.2% YTD

Overseas: 

  • Europe: DAX +0.3%, FTSE +0.5%, CAC +0.5%
  • Asia: Nikkei -1.2%, Hang Seng +0.1%, Shanghai +2.5%

Commodities: 

  • Crude Oil +0.33 @ 101.75
  • Nat Gas +0.27 @ 7.06
  • Gold -11.10 @ 1890.20
  • Silver -0.08 @ 23.42
  • Copper +0.03 @ 4.47
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