Morning Notes – Monday, November 21, 2022

Directional Bias For The Day:

• S&P Futures are lower at 9:00 AM, broke above a Double Bottom pattern at 8:00 AM – the 61.8% extension target near 3962.00 is achieved, and the 100% extension target is near 3965.00;
• The odds are for a sideways to down day with elevated volatility – watch for a break below 3948.25 and 3965.00 for clarity;
• No key economic data report is due during the day:

Directional Bias Before Open:

Key Levels:

• Critical support levels for S&P 500 are 3945.15, 3936.37, and 3922.14
• Critical resistance levels for S&P 500 are 3979.89, 3983.09, and 4002.19
• Key levels for E-mini futures: break above 3964.50, the high at 1:00 AM, and a break below 3948.00, the low of 7:00 AM

Pre-Open

• On Friday at 4:00 PM, S&P futures (December 2022) closed at 3973.25, and the index closed at 3965.34 – a spread of about +8.00 points; the futures closed at 3974.00; the fair value is -0.75
• Pre-NYSE session open, futures are lower – at 8:45 AM, S&P 500 futures were down by -13.25, Dow by -33, and NASDAQ by -61.50

Markets Around The World

• Markets in the East closed mostly lower – Tokyo closed higher
• European markets are mostly lower – Switzerland is higher
• Currencies (Compared to two weeks ago):

• 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)
  • The 10-year yield closed at 3.810%, down -34.6 basis points from two weeks ago;
  • The 30-year is at 3.903%, down -34.3 basis points;
  • The 2-year yield is at 4.501%, down -19.1 basis points;
  • The 10-Year-&-2-Year spread is at -0.691, down from -0.536
  • The 30-Year-&-10-Year spread is at 0.092, up from 0.090
• VIX
  • At 23.88 @ 8:00 AM; up from the last close; at/below the 5-day SMA;
  • Recent high = 26.59 on November 10; low = 22.37 on November 11
  • Sentiment: Risk-Off-Neutral

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

Previous Session

Major U.S. indices closed higher on Friday, November 18, in mixed volume. Dow Jones Industrial Average and NASDAQ Composite traded in lower volume. Major indices opened higher and most made Doji, Spinning Tops, or similar candles indicating indecision.

For the week, the major US indices closed lower in lower volume. Most markets in Europe and Asia closed lower. The dollar index was up, and most commodities were down. The US Treasury yields closed down.

From Briefing.com:

[…] Nine of the 11 S&P 500 sectors closed in the green, led by utilities (+2.0%) and real estate (+1.3%). The communication services (-0.4%) and energy (-0.9%) sectors were the lone holdouts in negative territory. The latter felt the pinch of falling oil prices today. WTI crude oil futures fell 2.2% to $80.13/bbl. […] Advancers led decliners by a 3-to-2 margin at the NYSE and an 11-to-10 margin at the Nasdaq. […] Existing home sales decreased 5.9% month-over-month in October to a seasonally adjusted annual rate of 4.43 million (Briefing.com consensus 4.38 million) versus an unrevised 4.71 million in September. That is the ninth straight month that existing home sales have fallen and it is the weakest pace of sales since late 2011, excluding the 2020 pandemic period. Total sales in October were down 28.4% from a year ago. […] The Leading Economic Index for October fell 0.8% (Briefing.com consensus -0.5%) after the prior revised decline of 0.5% (from 0.4%). Dow Jones Industrial Average: -7.1% YTD S&P Midcap 400: -11.7% YTD Russell 2000: -17.6% YTD S&P 500: -16.8% YTD Nasdaq Composite: -28.8% YTD