Market Remarks

Morning Notes – Wednesday, July 20, 2022

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower at 8:00 AM; drifted down more than 30 points from 10:30 PM high of 3964.25
  • The odds are for a down to sideways day with elevated volatility – watch for a break above 3947.75 for a change of sentiments
  • The key economic data report due during the day:
    • Existing Home Sales (5.37M est.; prev. 5.41M) at 10:00 AM

Directional Bias Before Open:

  • Weekly: In Correction
  • Daily: Uptrend Under Pressure
  • 120-Min: Side-Up
  • 30-Min: Up-Side
  • 15-Min: Side-Down
  • 6-Min: Down

Key Levels:

  • Critical support levels for S&P 500 are 3926.87, 3909.64, and 3899.92
  • Critical resistance levels for S&P 500 are 3939.81, 3945.86, and 3974.39
  • Key levels for E-mini futures: break above 3947.75, the high at 5:45 AM and a break below 3923.75, the low at 6:45 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (September 2022) closed at 3936.50,  and the index closed at 3936.69 – a spread of about -0.25 points; the futures closed at 3937.50; the fair value is -1.00
  • Pre-NYSE session open, futures are lower – at 7:45 AM, S&P 500 futures were down by -7.75, Dow by -64; and NASDAQ by -13.25

Markets Around The World

  • Markets in the East closed higher
  • European markets are lower
  • Currencies (Compared to two weeks ago):
    Up Down
    • Dollar index
    • GBP/USD
    • USD/JPY
    • USD/CHF
    • AUD/USD
    • NZD/USD
    • INR/USD
    • EUR/USD
    • USD/CAD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher
    • Precious metals are lower
    • Industrial metals are mostly lower
    • Soft commodities are mostly higher
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.019%, up +21.0 basis points from two weeks ago;
    • The 30-year is at 3.179%, up +14.7 basis points;
    • The 2-year yield is at 3.246%, up +41.7 basis points;
    • The 10-Year-&-2-Year spread is at -0.227, up from -0.020
    • The 30-Year-&-10-Year spread is at 0.160, up from 0.223
  • VIX
    • At 24.64 @ 6:30 AM; up from the last close; below the 5-day SMA;
    • Recent high = 29.06 on July 13; low = 24.13 on July 15
    • Sentiment: Risk-Off

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

Weekly:
  • The week ending on July 15 was a Haram Dragonfly Doji
    • Stochastic (9,1, 3): %K is above %D; around 40
    • RSI-9 is above 40 after making a Bullish Divergence on June 13
  • The week was down -36.22 or -0.9%; the 5-week ATR  is 212.85
  • A down week; third in the least five weeks and seventh in the previous ten weeks; 12 of the last 15 weeks were down
  • The weekly pivot point=3821.89, R1=3922.21, R2=3981.27; S1=3762.83, S2=3662.51; S1 pivot level was breached
  • Below 10-week EMA and 39-week SMA; at/below 89-week SMA
  • In Correction
Daily
  • A relatively large green candle with almost no upper and lower shadows; broke above a symmetrical triangle – the 61.8% extension target is near 4070.00, and the 100% extension target is near 4190.00;  the 100% extension target for the ABCD pattern is around 4025.00
    • Stochastic (9, 1, 3): %K is above %D; near 100;
    • RSI-9 is rising above 60; above 8-day EMA;
  • Above 20-day EMA; at/below 50-day EMA; below 200-day SMA, and 100-day SMA;
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Turning down from a resistance level around 3950.00, the high on June 28;
    • RSI-21 is below 60 from above 85; Bearish Divergence at 12:00 AM
    • Above EMA20, which is above EMA10 of EMA50
  • Bias: Side-Up
30-Minute (E-mini futures)
  • Drifting down since 10:30 PM from 3964.25 after rallying from 3820.00 at 3:30 PM on Monday
    • RSI-21 has moved to just below 50 from above 75 and after making a Bearish Divergence
    • Below EMAS20 but above EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) is drifting sideways to down since 12:00 AM
  • The Bollinger Band is relatively stable, and the price is walking down the lower band
  • Bias: Side-Down

Previous Session

Major U.S. indices closed higher on Tuesday, July 19, in mixed volume. Dow Jones Transportation Average and NASDAQ Composite traded in lower volume. The market opened higher and then traded higher for the rest of the day. Most indices are breaking above symmetrical triangles.

From Briefing.com:

[…]

The S&P 500 steadily climbed to close near its intraday high, which put it above the key technical level of its 50-day moving average (3,922). Each of the main indices closed right around session highs.

[…]

Advancing issuing outpaced declining issues by a 5-to-1 margin at the NYSE and a nearly 3-to-1 margin at the Nasdaq.

[…]

All 11 sectors closed in the green with gains from 0.7% (utilities) to 3.6% (industrials). The countercyclical consumer staples (+1.1%), health care (+1.8%), and utilities (+0.7%) sectors trailed the broader market.

[…]

Energy complex futures settled the session mostly lower. WTI crude oil futures fell 2.0% to $100.72/bbl. Natural gas futures fell 2.8% to $7.19/mmbtu. Unleaded gasoline futures rose 0.9% to $3.31/gal.

Treasury yields rose today with the 2-yr note closing up six basis points to 3.22%. The 10-yr note yield rose six basis points to 3.02%.

[…]
  • June Housing Starts 1.559 mln (Briefing.com consensus 1.598 mln); Prior was revised to 1.591 mln from 1.549 mln; June Building Permits 1.685 mln (Briefing.com consensus 1.680 ml); Prior was unrevised at 1.695 mln
[…]
  • Dow Jones Industrial Average: -12.4% YTD
  • S&P 400: -16.4% YTD
  • S&P 500: -17.4% YTD
  • Russell 2000: -20.0% YTD
  • Nasdaq Composite: -25.1% YTD

Overseas: 

  • Europe: DAX +2.7%, FTSE +1.0%, CAC +1.8%
  • Asia: Nikkei +0.7%, Hang Seng -0.9%, Shanghai +0.0%

Commodities: 

  • Crude Oil -2.05 @ 100.72
  • Nat Gas -0.21 @ 7.18
  • Gold +1.70 @ 1709.70
  • Silver -0.02 @ 18.63
  • Copper -0.03 @ 3.28
Exit mobile version