Morning Notes – Tuesday, November 8, 2022

Directional Bias For The Day:

• S&P Futures are higher at 8:45 AM; moving up since 7:30 AM
• The odds are for an up day with elevated volatility – watch for a break below 3818.50 for a change of sentiments
• No key economic data report is due during the day:

Directional Bias Before Open:

Key Levels:

• Critical support levels for S&P 500 are 3801.34, 3767.12, and 3760.26
• Critical resistance levels for S&P 500 are 3839.89, 3866.27, and 3894.44
• Key levels for E-mini futures: break above 3831.50, the high at 6:45 AM on November 3, and a break below 3818.50, the low of 7:30 AM

Pre-Open

• On Monday at 4:00 PM, S&P futures (December 2022) closed at 3816.00, and the index closed at 3806.80 – a spread of about +9.25 points; the futures closed at 3815.25; the fair value is +0.75
• Pre-NYSE session open, futures are higher – at 8:15 AM, S&P 500 futures were up by +8.75, Dow by +93, and NASDAQ by +53.25

Markets Around The World

• Markets in the East closed mostly higher – Shanghai and Hong Kong closed lower; Mumbai was closed
• European markets are higher
• Currencies (Compared to two weeks ago):

• Commodities (Compared to two weeks ago):
  • Energy futures are higher
  • Precious metals are higher
  • Industrial metals are mostly higher
  • Soft commodities are mostly higher
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 4.197%, down -3.7 basis points from two weeks ago;
  • The 30-year is at 4.307%, down -5.6 basis points;
  • The 2-year yield is at 4.705%, up +21.3 basis points;
  • The 10-Year-&-2-Year spread is at -0.508, down from -0.258
  • The 30-Year-&-10-Year spread is at 0.110, down from 0.129
• VIX
  • At 24.66 @ 7:30 AM; up from the last close; below the 5-day SMA;
  • Recent high = 34.88 on September 28; low = 22.64 on September 9
  • Sentiment: Risk-Neutral-to-On

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

Previous Session

Major U.S. indices closed higher on Monday, November 7, in lower volume. Dow Jones Transportation Average and Russell 200 traded in lower volume. The major indices opened higher, moved sideways until the afternoon, and advanced higher.

All but two S&P sectors – Real Estate and Utilities – closed higher

From Briefing.com:

[…] The major indices experienced choppy action most of the session, pressured by rising Treasury yields and price action in Apple (AAPL 138.92, +0.54, +0.4%). The stock market shifted into rally mode in the afternoon, however, which brought the S&P 500 above the 3,800 level. The shift in momentum coincided with the U.S. Dollar Index, which had been on a steady decline, taking another leg lower. The U.S. Dollar Index fell 1.8% on Friday and was down another 0.7% to 110.16 today. […] Market breadth reflected broad buying interest. Advancers led decliners by a roughly 2-to-1 margin at the NYSE and a 4-to-3 margin at the Nasdaq. […] Buyers in the equity market were not deterred when the 10-yr Treasury note yield settled at 4.21% and the 2-yr note yield rose six basis points to 4.73%. […] The key takeaway from the report is that consumer credit growth persisted, demonstrating that the demand for credit has not vanished in a rising interest rate environment. That point notwithstanding, a slowdown in the pace of expansion is expected as home lending activity and auto lending activity weaken in the face of high prices and high interest rates. Dow Jones Industrial Average: -9.7% YTD S&P Midcap 400: -14.6% YTD S&P 500: -20.1% YTD Russell 2000: -19.4% YTD Nasdaq Composite: -32.5% YTD Overseas:  Europe: DAX +0.6%, FTSE -0.5%, CAC 0.0% Asia: Nikkei +1.2%, Hang Seng +2.7%, Shanghai +0.2% Commodities:  Crude Oil -0.65 @ 91.99 Nat Gas +0.55 @ 7.27 Gold +0.80 @ 1678.90 Silver +0.08 @ 20.89 Copper -0.09 @ 3.59