Market Remarks

Morning Notes – Tuesday, April 11, 2023

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are higher at 8:30 AM – moving sideways with up-down fluctuations
  • The odds are for a sideways to an up day – watch for a break above 4149.00 and a break below 4132.75 for clarity
  • No major economic data report is due during the day.

Directional Bias Before Open:

  • Weekly: Uptrend Resumed
  • Daily: Uptrend
  • 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 4095.45, 4075.57, and 4072.56
  • Critical resistance levels for S&P 500 are 4116.71, 4124.20, and 4133.13
  • The key levels for E-mini futures are a break above 4149.00, the high at 5:30 AM, and a break below 4132.75, the low at 7:30 AM

Pre-Open

  • On Monday at 4:00 PM, S&P futures (June 2023) closed at 4137.75, and the index closed at 4109.11 – a spread of about +27.75 points; the futures closed at 4136.25; the fair value is +0.50
  • Pre-NYSE session open, futures were mixed – at 8:15 AM, S&P 500 futures were up by +2.00, Dow up by +10, and NASDAQ down by -15.75

Markets Around The World

  • Markets in the East closed mostly higher – Shanghai closed down
  • European markets are mostly higher – Spain is lower
  • 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 higher
    • Precious metals are higher
    • Industrial metals are mostly higher
    • Soft commodities are mostly higher
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.409, down -11.9 basis points from two weeks ago;
    • The 30-year is at 3.616%, down -14.4 basis points;
    • The 2-year yield is at 4.016%, up +1.4 basis points;
    • The 10-Year-&-2-Year spread is at -0.607, down from -0.474
    • The 30-Year-&-10-Year spread is at 0.207, down from +0.232
  • VIX
    • At 19.19 @ 8:00 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-Neutral

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

Weekly:
  • The week ending on April 7 was a small red Spinning Top candle near the close of the previous day’s candle.
    • Stochastic (9,1, 3): %K is above the %D;
    • RSI-9 is just below 60
  • The week was down -4.29 or -0.1%; the 5-week ATR  is 148.12
  • A down week, second in the last five weeks, and fifth in the previous ten weeks;
  • The weekly pivot point=4102.66, R1=4135.49, R2=4165.95; S1=4072.20, S2=4039.37; No pivot levels were breached
  • Above 10-week EMA and 39-week SMA; below 89-week SMA
  • Uptrend Resumed
Daily
  • A small green candle – side-by-side two white lines
    • Stochastic (9, 1, 3): %K is above the %D
    • RSI-9 is just above 65; 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
    • RSI-21 is above 50
    • At/above EMA20, which is above EMA10 of EMA50
  • Bias:  Up-Side
30-Minute (E-mini futures)
  • Attempting to break above a Horizontal Channel since 3:30 PM on Monday; a convincing break above 4136.00 will have a 61.8% extension target around 4158.00 and a 100% extension target around 4172.00;
    • RSI-21 is around 50
    • Below EMA10 of EMA50, but at/above EMA20
  • Bias: Up-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving sideways to down since 10:00 PM.
  • The Bollinger Band has been expanding a little since 6:00 AM, with the price declining from the upper band to the lower band and then bouncing up t the middle band.
  • Bias: Side

Previous Session

Major U.S. indices closed mostly higher on Monday, April 10, in mostly lower volume. NASDAQ Composite closed lower. Dow Jones Transportation Average traded in higher volume.

The major indices opened lower but turned around immediately and gradually ascended higher for the rest of the day.

From Briefing.com:

The stock market looked a lot weaker at the open as the main indices fell under the weight of mega cap losses. […]

The Dow Jones Industrial Average had a stronger showing than its peers, declining just 0.4% at its low for the day, while the tech-heavy Nasdaq saw a loss of 1.3% at its session low before settling the day close to flat. Notably, the intraday low for the S&P 500 coincided with last Wednesday’s worst level (4,072). Today’s best performer, however, was the small cap Russell 2000 (+1.0%).

The main indices all improved noticeably when the mega cap stocks started to pare earlier losses.

[…]

Advancers led decliners by a nearly 2-to-1 margin at the NYSE and a 5-to-3 margin at the Nasdaq.

Roughly half of the S&P 500 sectors closed with a gain. The economically-sensitive industrial (+0.9%), energy (+0.7%), and materials (+0.5%) sectors led the outperformers while the communication services (-0.7%), utilities (-0.2%), and information technology (-0.2%) sectors fell to the bottom of the pack.

[…]
  • Nasdaq Composite: +15.5% YTD
  • S&P 500: +7.0% YTD
  • S&P Midcap 400: +1.9% YTD
  • Dow Jones Industrial Average: +1.3% YTD
  • Russell 2000: +0.6% YTD
[…]
  • Wholesale inventories rose 0.1% in February (Briefing.com consensus +0.2%) following a revised 0.6% decline in January (from -0.4%).

[…]

Overseas: 

  • Europe: DAX market closed, FTSE market closed, CAC market closed
  • Asia: Nikkei +0.4%, Hang Seng market closed, Shanghai -0.4%

Commodities: 

  • Crude Oil -0.84 @ 79.86
  • Nat Gas +0.16 @ 2.17
  • Gold -20.20 @ 2004.60
  • Silver -0.14 @ 24.92
  • Copper -0.04 @ 3.98
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