Market Remarks

Morning Notes – Tuesday, March 28, 2023

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower at 8:00 AM – declined from the 3:00 AM high of 4023.75  to around 4000.00
  • The odds are for a down day with elevated volatility – watch for a break above 4023.75 for a change of sentiments
  • The major economic data report is due during the day.
    • Goods Trade Balance ( -90.2B est.; prev. -91.5B) at 8:30 AM
    • Prelim Wholesale Inventories ( -0.1% est.; prev. -0.4% ) at 8:30 AM
    • HPI ( -0.2% est.; prev. -0.1%) at 9:00 AM
    • S&P/CS Composite-20 HPI ( 2.6% est.; prev. 4.6% ) at 9:00 AM
    • CB Consumer Confidence ( 101.0 est.; prev. 12.9 ) at 10:00 AM

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 3970.49, 3932.03, and 3909.16
  • Critical resistance levels for S&P 500 are 3992.92, 4007.66, and 4039.49
  • The key levels for E-mini futures are a break above 4023.75, a high at 3:00 AM,  and a break below 3997.50, a low at 3:45 AM on Monday

Pre-Open

  • On Monday at 4:00 PM, S&P futures (June 2023) closed at 4010.25, and the index closed at 3977.53 – a spread of about +32.75 points; the futures closed at 4007.25; the fair value is +3.00
  • Pre-NYSE session open, futures were lower – at 7:00 AM, S&P 500 futures were down by -7.00, Dow by -32, and NASDAQ by -30.00

Markets Around The World

  • Markets in the East closed mostly higher – Shanghai and Mumbai closed lower
  • European markets are mixed – Germany, the UK, France, and STOXX 600 are lower; Spain, Italy, and Switzerland are higher
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • USD/CHF
  • Dollar index
  • USD/JPY
  • AUD/USD
  • NZD/USD
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are lower
    • Precious metals are higher
    • Industrial metals are mostly lower
    • Soft commodities are mixed
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.528, up +1.3 basis points from two weeks ago;
    • The 30-year is at 3.760%, up +9.4 basis points;
    • The 2-year yield is at 3.956%, down -2.9 basis points;
    • The 10-Year-&-2-Year spread is at -0.428, up from -0.470
    • The 30-Year-&-10-Year spread is at 0.232, up from +0.151
  • VIX
    • At 20.93 @ 6:15 AM; up from the last close; below the 5-day SMA;
    • Recent high = 30.81 on March 13; low = 19.94 on March 22
    • Sentiment: Risk-Off

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

Weekly:
  • The week ending on March 24 was a small green candle with a long upper shadow and a small lower shadow
    • Stochastic (9,1, 3): %K is above the %D;
    • RSI-9 is just above 50
  • The week was up +54.35 or +1.4%; the 5-week ATR  is 154.85
  • An up week, third in the last five weeks, and fifth in the previous ten weeks;
  • The weekly pivot point=3973.21, R1=4037.27, R2=4103.54; S1=3906.94, S2=3842.88; R1 pivot level was breached
  • Below 10-week EMA; above 39-week SMA; below 89-week SMA
  • Uptrend Under Pressure
Daily
  • A relatively small red-bodied candle that looked like a Doji, with a larger upper shadow than the lower shadow
    • Stochastic (9, 1, 3): %K is above the %D.
    • RSI-9 is above 50; above 8-DMA
  • Above 20-day EMA; at/below 50-day EMA; above 100-day SMA and 200-day SMA;
  • In Correction
2-Hour (E-mini futures)
  • Moving in the middle of an up-sloping flag, which is in effect since 2:00 PM on March 9
    • RSI-21 has declined to just above 40 from 65
    • At/below EMA20, but above EMA10 of EMA50
  • Bias:  Up-Side
30-Minute (E-mini futures)
  • Breaking below a Symmetrical/Descending Triangle – the 61.8% extension target is near 3980.00, and the 100% extension target is near 3967.00
    • RSI-21 has declined to 40 from above 60
    • Below EMA20, which is below EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways to down since 10:00 PM on Sunday.
  • The Bollinger Band has been expanding since 3:30 AM, with the price walking down the lower band.
  • Bias: Side-Down

Previous Session

Major U.S. indices mostly closed higher on Monday, March 27, in lower volume. NASDAQ Composite closed down. The major indices opened higher but then drifted lower. The day’s range was small, and the price action was muted with a down bias. Most of the advance occurred at the open. All but three S&P sectors – Technology, Real Estate, and Communication Services – closed higher.

From Briefing.com:

[…]

Despite relative strength from the banking sector, the S&P 500 and Dow Jones Industrial Average closed with only slim gains while the Nasdaq was pinned in negative territory at the close.

[…]

Most of the S&P 500 sectors closed with a gain led by energy (+2.1%), which was boosted by rising oil prices. WTI crude oil futures rose 5.5% to $73.05/bbl.

The financial sector (+1.4%) was another top performer along with industrials (+0.8%) and materials (+0.7%). On the flip side, the heavily weighted communication services (-1.1%) and information technology (-0.9%) sectors were the worst performers along with real estate (-0.4%).

Notably, small and mid cap stocks outperformed their larger peers today. The Russell 2000 rose 1.1% and the S&P Mid Cap 400 was up 0.9% at the close.

[…]

The 2-yr note yield rose 23 basis points to 3.79% and the 10-yr note yield rose 15 basis points to 3.53%. The U.S. Dollar Index fell 0.2% to 102.88.

  • Nasdaq Composite: +12.4% YTD
  • S&P 500: +3.6% YTD
  • S&P Midcap 400: -0.2% YTD
  • Russell 2000: -0.4% YTD
  • Dow Jones Industrial Average: -2.2% YTD
[…]

Overseas: 

  • Europe: DAX +1.1%, FTSE +0.9%, CAC +0.9%
  • Asia: Nikkei +0.3%, Hang Seng -1.8%, Shanghai -0.4%

Commodities: 

  • Crude Oil +3.82 @ 73.05
  • Nat Gas -0.12 @ 2.23
  • Gold -30.00 @ 1953.00
  • Silver -0.18 @ 23.11
  • Copper +0.02 @ 4.08
Exit mobile version