Market Remarks

Morning Notes – Wednesday, November 9, 2022

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower at 8:30 AM; moving sideways to down since 3:30 PM in large swings
  • The odds are for a down day with elevated volatility – watch for a break above 3835.25 for a change of sentiments
  • No key economic data report is due during the day:

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3814.19, 3786.28, and 3767.12
  • Critical resistance levels for S&P 500 are 3834.07, 3849.00, and 3858.55
  • Key levels for E-mini futures: break above 3835.25, the high at 8:00 AM, and a break below 3816.25, the low of 5:15 AM

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (December 2022) closed at 3835.25, and the index closed at 3828.11 – a spread of about +7.25 points; the futures closed at 3835.25; the fair value is +0.00
  • Pre-NYSE session open, futures are lower – at 8:00 AM, S&P 500 futures were down by -4.00, Dow by -88, and NASDAQ by -9.25

Markets Around The World

  • Markets in the East closed mixed – Shanghai, Hong Kong, Tokyo, and Mumbai closed lower; Sydney, Seoul, and Singapore closed higher
  • European markets are mostly lower – Spain and Switzerland are up
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • Dollar index
  • USD/CHF
  • USD/JPY
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are higher
    • Precious metals are higher
    • Industrial metals are higher
    • Soft commodities are mixed
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 4.126%, up +6.2 basis points from two weeks ago;
    • The 30-year is at 4.314%, up +5.1 basis points;
    • The 2-year yield is at 4.59%, up +19.7 basis points;
    • The 10-Year-&-2-Year spread is at -0.489, down from -0.354
    • The 30-Year-&-10-Year spread is at 0.144, down from 0.155
  • VIX
    • At 25.46 @ 7:30 AM; down from the last close; above 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:

Weekly:
  • The week ending on November 4 was a large red Harami candle with open and close near the previous week’s open and close and with small upper and lower shadows
    • Stochastic (9,1, 3): %K is crossing below %D;
    • RSI-9 is near 45
  • The week was down -130.51 or -3.3%; the 5-week ATR  is 199.77
  • A down week; second in the last five weeks, and sixth in the previous ten weeks;
  • The weekly pivot point=3793.50, R1=3888.84, R2=4007.14; S1=3675.20, S2=3579.86; S1 pivot level was breached
  • At/below 10-week EMA; below 39-week SMA, and 89-week SMA
  • Uptrend Resumed
Daily
  • A green Spinning Top candle with a small real body that looks like a Doji;
    • Stochastic (9, 1, 3): %K is above %D
    • RSI-9 is above 55; above 8-day EMA;
  • Above 20-day EMA and 50-day EMA; below 100-day SMA and 200-day SMA;
  • Uptrend Under Pressure
2-Hour (E-mini futures)
  • Moving up since 10:00 AM on November 3; higher highs and higher lows from a low of 3704.25 to above 3860.00; moving sideways to down since 2:00 PM on Tuesday.
    • RSI-21 declined to below 50 from around 65
    • At/above EMA20, which is above EMA10 of EMA50
  • Bias: Up-Side
30-Minute (E-mini futures)
  • Moving sideways to down since 3:00 PM on Tuesday; broke above an Ascending triangle – the 61.8% extension target near 3864.00 is achieved, and the 100% extension target is near 3900.00
    • RSI-21 is moving around 50
    • At/below EMA20, which is at EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been drifting sideways to down since 9:45 PM
  • The Bollinger Band is relatively expanded and stable, with the price near the middle band
  • Bias: Side

Previous Session

Major U.S. indices closed mostly higher on Tuesday, November 8, in mostly higher volume. Russell 200 closed down in lower volume. The major indices opened up and then moved higher before tumbling in the early afternoon trading and dipping into negative territory. They recovered in the late afternoon trading to close up.

Dow Jones Industrial Average broke above the downtrend line from the all-time high. All but one S&P sector – COnsumer Discretionary – closed higher

From Briefing.com:

[…]

Treasury yields were a supportive factor for the equity market today. The 10-yr note yield, which tested 4.24% overnight, settled the session at 4.13%. The 2-yr note yield settled at 4.66%. The U.S. Dollar Index was unable to hold an early gain and fell prone to continued selling pressure, dropping 0.4% to 109.64.

For the S&P 500 sectors, Materials (+1.7%) enjoyed a first place spot thanks to earnings-driven gains in DuPont (DD 66.28, +4.54, +7.4%) and Mosaic (MOS 52.89, +2.97, +6.0%). Meanwhile, consumer discretionary (-0.3%) was the lone sector in negative territory.

[…]

Economic data today was limited to the October NFIB Small Business Optimism Index, which came in at 91.3 after the prior reading of 92.1.

Dow Jones Industrial Average: -8.7% YTD
S&P Midcap 400: -14.5% YTD
S&P 500: -19.7% YTD
Russell 2000: -14.5% YTD
Nasdaq Composite: -32.1% YTD

Overseas: 

  • Europe: DAX +1.2%, FTSE +0.1%, CAC +0.4%
  • Asia: Nikkei +1.3%, Hang Seng -0.2%, Shanghai -0.4%

Commodities: 

  • Crude Oil -2.87 @ 89.12
  • Nat Gas -0.63 @ 6.64
  • Gold +35.20 @ 1714.10
  • Silver +0.50 @ 21.39
  • Copper +0.05 @ 3.64
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