Market Remarks

Morning Notes – Wednesday, April 5, 2023

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are lower at 9:00 AM – moving sideways to down since 12:00 PM on Tuesday between 4133.50 and 4115.25
  • The odds are for a sideways to down day – watch for a break above 4133.50 and a break below 4115.25 for more clarity
  • The major economic data report is due during the day.
    • ADP Non-Farm Employment Change ( 145K est. 208K est.; prev. 261K ) at 8:15 AM
    • Trade Balance ( -70.5B vs. -68.8B est.; prev. -68.7B) at 8:30 AM
    • Final Services PMI ( 53.8 est.; prev. 53.8) at 9:45 AM
    • ISM Services PMI ( 54.3 est.; prev. prev. 55.1) at 10:00 AM

Directional Bias Before Open:

  • Weekly: Uptrend Resumed
  • Daily: Uptrend
  • 120-Min: Up
  • 30-Min: Up-Side
  • 15-Min: Side
  • 6-Min:  Side

Key Levels:

  • Critical support levels for S&P 500 are 4086.87, 4081.71, and 4068.62
  • Critical resistance levels for S&P 500 are 4106.64, 4125.20, and 4133.13
  • The key levels for E-mini futures are a break above 4133.50, the high at 8:00 PM, and a break below 4115.25, the low at 12:15 PM on Tuesday

Pre-Open

  • On Tuesday at 4:00 PM, S&P futures (June 2023) closed at 4130.25, and the index closed at 4100.60 – a spread of about +30.25 points; the futures closed at 4129.00; the fair value is +1.25
  • Pre-NYSE session open, futures were lower – at 8:45 AM, S&P 500 futures were down by -7.75, Dow by -49, and NASDAQ by -18.00

Markets Around The World

  • Markets in the East closed mostly higher – Tokyo closed down; Shanghai and Hong Kong were closed for trading
  • European markets are mixed – the UK, Spain, and Switzerland are up; Germany, France, Italy, and STOXX 600 are down
  • Currencies (Compared to two weeks ago):
Up Down
  • EUR/USD
  • GBP/USD
  • AUD/USD
  • NZD/USD
  • Dollar index
  • USD/JPY
  • USD/CHF
  • USD/CAD
  • INR/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • Precious metals are higher
    • Industrial metals are mostly higher
    • Soft commodities are mixed
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.311, down -29.5 basis points from two weeks ago;
    • The 30-year is at 3.568%, down -16.9 basis points;
    • The 2-year yield is at 3.838%, down -32.8 basis points;
    • The 10-Year-&-2-Year spread is at -0.504, up from -0.510
    • The 30-Year-&-10-Year spread is at 0.205, up from +0.182
  • VIX
    • At 19.66 @ 6:45 AM; up from the last close; above the 5-day SMA;
    • Recent high = 30.81 on March 13; low = 18.16 on March 2
    • Sentiment: Risk-Off

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

Weekly:
  • The week ending on March 31 was a relatively large green candle with a small lower shadow and almost no upper shadow
    • Stochastic (9,1, 3): %K is above the %D;
    • RSI-9 is just below 60
  • The week was up +138.32 or +3.5%; the 5-week ATR  is 159.22
  • An up week, fourth in the last five weeks, and sixth in the previous ten weeks;
  • The weekly pivot point=4057.20, R1=4162.86, R2=4216.42; S1=4003.64, S2=3897.98; R1/R2 pivot levels were breached
  • Above 10-week EMA and 39-week SMA; below 89-week SMA
  • Uptrend Resumed
Daily
  • A Bearish Engulfing candle with small upper and lower shadows;
    • Stochastic (9, 1, 3): %K crossed below the %D
    • RSI-9 declined to 65 from above 70; above 8-DMA
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA;
  • Uptrend
2-Hour (E-mini futures)
  • Moving up within an up-sloping flag, which is in effect since 2:00 PM on March 9, breached the upper bound on April 3 and then retreated to the middle of the flag.
    • RSI-21 has declined to just above 30 after making Bearish Divergence at 6:00 AM on Tuesday
    • Below EMA20, ut above EMA10 of EMA50
  • Bias:  Up
30-Minute (E-mini futures)
  • Moving sideways to down since 11:00 AM on April 4;
    • RSI-21 has been moving below 40
    • Below EMA20, which is below EMA10 of EMA50
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been sideways to down since 4:00 PM.
  • The Bollinger Band has been contracting since 7:30 AM
  • Bias: Side

Previous Session

Major U.S. indices closed lower on Tuesday, April 4, in mixed volume. Russell 2000 and Dow Jones Transportation traded in higher volume.

The major indices opened flat and made their high for the day in the first hour of trading. They declined for the rest of the day with few up moves.

From Briefing.com:

The Dow Jones Industrial Average, Nasdaq Composite, and S&P 500 logged relatively modest losses today as the resilience to selling that drove yesterday’s price action dissipated. Initially, the main indices all moved higher, but gains quickly faded and the market traded near its worst levels of the day for most of the session. The S&P 500 was able to close right on top of the 4,100 level thanks to a last minute move higher. […]

Industrials (-2.3%), energy (-1.7%), and materials (-1.5%) were the biggest laggards. Meanwhile, the defensive-oriented utilities sector (+0.5%) led the outperformers followed by communication services (+0.3%).

[…]

The 2-yr note yield, at 3.99% just before the release, fell 15 basis points to 3.84%. The 10-yr note yield, at 3.46% before the release, fell nine basis points to 3.34%. The U.S. Dollar Index fell 0.5% to 101.60.

[…]
  • Nasdaq Composite: +15.9% YTD
  • S&P 500: +6.8% YTD
  • S&P Midcap 400: +1.6% YTD
  • Dow Jones Industrial Average: +0.8% YTD
  • Russell 2000: +0.4% YTD
[…]
  • Factory orders declined 0.7% month-over-month in February (Briefing.com consensus -0.5%) following a downwardly revised 2.1% decline (from -1.6%) in January. Shipments of manufactured goods decreased 0.5% month-over-month after increasing 0.3% in January.
  • […]
  • JOLTS – Job Openings totaled 9.931 million in February following a revised count of 10.563 million in January (from 10.824 million). This was the first reading below 10 million since May 2021.
[…]

Overseas: 

  • Europe: DAX +0.1%, FTSE -0.5%, CAC -0.0%
  • Asia: Nikkei +0.4%, Hang Seng -0.7%, Shanghai +0.5%

Commodities: 

  • Crude Oil +0.12 @ 80.72
  • Nat Gas -0.00 @ 2.11
  • Gold +36.60 @ 2038.30
  • Silver +1.11 @ 25.15
  • Copper -0.07 @ 3.98
Exit mobile version