Morning Notes – Wednesday, November 30, 2022

Sunil Sharma

2 years ago

Directional Bias For The Day:

S&P Futures are a bit higher at 8:00 AM; drifting sideways since 12:30 AM
The odds are for an up-to-sideways day with elevated volatility – watch for a break above 3977.75 and a break below 3956.50 for clarity
The key economic data report is due during the day:
- ADP Non-Farm Employment Change ( 196K est.; prev. 239K) at 8:15 AM
- Prelim GDP ( 2.8% est.; prev. 2.6%) at 8:30 AM
- Prelim GDP Price Index ( 4.1% est.; prev. 4.1% ) at 8:30 AM
- Good Trade Balance ( -90.7B est.; prev. -92.2B) at 8:30 AM
- Prelim Wholesale Inventories ( 0.5% est.; prev. 0.6%) at 8:30 AM
- Chicago PMI ( 47.0 est.; prev. 45.2) at 10:00 AM
- JOLTS JOb Openings ( 10.24M est.; prev. 10.72M) at 10:00 AM
- Pending Home Sales ( -5.8% est.; prev. -10.2% ) at 10:00 AM

Directional Bias Before Open:

Weekly: Uptrend
Daily: Uptrend Under Pressure
120-Min: Side-Down

30-Min: Down-Side
15-Min: Down-Side
6-Min: Up

Key Levels:

Critical support levels for S&P 500 are 3952.29, 3944.33, and 3937.65
Critical resistance levels for S&P 500 are 3968.94, 3976.77, and 3997.60
The key levels for E-mini futures: break above 3977.75, the high at 4:15 AM, and a break below 3956.50, the low of 6:45 PM

Pre-Open

On Tuesday at 4:00 PM, S&P futures (December 2022) closed at 3961.25, and the index closed at 3957.63 – a spread of about +3.50 points; the futures closed at 3962.00; the fair value is -0.75
Pre-NYSE session open, futures are higher – at 6:45 AM, S&P 500 futures were up by +8.00, Dow by +21, and NASDAQ by +42.50

Markets Around The World

Markets in the East mainly closed higher – Tokyo closed down
European markets are higher
Currencies (Compared to two weeks ago):

Up	Down
Dollar index GBP/USD USD/CHF NZD/USD USD/CAD INR/USD	EUR/USD USD/JPY AUD/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)
- The 10-year yield closed at 3.748%, down -5.1 basis points from two weeks ago;
- The 30-year is at 3.803%, down -17.9 basis points;
- The 2-year yield is at 4.471%, up +12.6 basis points;
- The 10-Year-&-2-Year spread is at -0.723, down from -0.546
- The 30-Year-&-10-Year spread is at 0.055, down from 0.183
VIX
- At 22.07 @ 6:45 AM; up from the last close; above the 5-day SMA;
- Recent high = 26.59 on November 10; low = 20.31 on November 24
- Sentiment: Risk-Off-Neutral

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

Weekly:	The week ending on November 25 was a green candle following a Doji, indicating a bullish turn following an indecisive week Stochastic (9,1, 3): %K is above %D near 90; RSI-9 is above 55 The week was up +60.78 or +1.5%; the 5-week ATR is 171.53 An up week, third in the last five weeks, and fifth in the previous ten weeks; The weekly pivot point=3997.83, R1=402.31, R2=4098.51; S1=3961.63, S2=3897.15; T1 pivot level was breached Above 10-week EMA, below 39-week SMA, and 89-week SMA Uptrend
*Daily*	A small Doji candle with a longer lower shadow than the upper shadow Stochastic (9, 1, 3): %K is below %D RSI-9 is near 50; below 8-day EMA; Above 20-day EMA, 50-day EMA, and 100-day SMA; below 200-day SMA; Confirmed Uptrend
*2-Hour (E-mini futures)*	Drifting lower in steps since 10:00 AM on November 23 RSI-21 bounced up to above 40 from around 15 and after making a Bullish Divergence at 6:00 AM on Tuesday Below EMA20, which is below EMA10 of EMA50 Bias: Side-Down
*30-Minute (E-mini futures)*	Bouncing up since 11:00 AM on Tuesday – up nearly 30 points RSI-21 is around 50 from around 25 a 3:00 PM on Monday and after making a Bullish Divergence at 11:00 AM on Tuesday At/above EMA20, which is at/below EMA10 of EMA50 Bias: Down-Side
*15-Minute (E-mini futures)*	The Bollinger Band (20, 2.0) has been drifting up since 9:30 PM The Bollinger Band is relatively stable, and a bit contracted Bias: Down-Side

Previous Session

Major U.S. indices closed mixed on Tuesday, November 29, in lower volume. S&P 500, NASDAQ Composite, and Wilshire 5000 TotalMarket Index closed lower.

The major indices opened higher but then declined after the first hour of trading to the lows by late morning. They then mostly drifted higher in the afternoon.

From Briefing.com:

[…]
Today’s trade started on a more upbeat note, aiming to rebound from yesterday’s retreat. The wind got knocked out of the market’s sails, however, around 11:00 a.m. ET
[…]
The Vanguard Mega Cap Growth ETF (MGK) logged a 0.9% loss versus a 0.3% gain in the Invesco S&P 500 Equal Weight ETF (RSP).

After the initial leg lower, the market was able to inch off session lows. The Dow Jones Industrial Average snuck into positive territory in the late afternoon, climbing off a 0.6% loss earlier.
[…]
Advancers led decliners by a roughly 3-to-2 margin at the NYSE and were just about even with decliners at the Nasdaq.

The Russell 2000 (+0.3%) and S&P Mid Cap 400 (+0.3%) were pockets of relative strength today.

Roughly half of the 11 S&P 500 sectors closed in the green. Real estate (+1.7%) and energy (+1.3%) sat atop the leaderboard while information technology (-1.0%) and utilities (-0.7%) fell to the bottom of the pack.
[…]
Treasury yields settled noticeably higher than levels seen earlier. The 2-yr note yield, which flirted with 4.40% earlier, settled at 4.47%. The 10-yr note yield, which hit 3.65% overnight, settled at 3.75%.
[…]

September FHFA Housing Price Index 0.1%; Prior -0.7%

September S&P Case-Shiller Home Price Index 10.4% (Briefing.com consensus 10.7%); Prior 13.1%

November Consumer Confidence 100.2 (Briefing.com consensus 100.0); Prior was revised to 102.2 from 102.5

[…]

Dow Jones Industrial Average: -6.8% YTD

S&P Midcap 400: -11.4% YTD

Russell 2000: -18.2% YTD

S&P 500: -17.0% YTD

Nasdaq Composite: -29.8% YTD

Overseas:

Europe: DAX -0.2%, FTSE +0.5%, CAC +0.1%

Asia: Nikkei -0.5%, Hang Seng +5.2%, Shanghai +2.3%

Commodities:

Crude Oil +1.24 @ 78.42

Nat Gas +0.05 @ 7.25

Gold +9.50 @ 1748.70

Silver +0.02 @ 20.92

Copper +0.03 @ 3.64