Morning Notes – Wednesday, April 19, 2023

Directional Bias For The Day:

• S&P Futures are lower at 8:30 AM; broke below an upsloping flag overnight – the 100% extension target around 4159.00 is achieved, and the 161.8% extension target is around 4144.00
• The odds are for a down day – watch for a break above 4169.00 for a change of sentiments
• The major economic data report due during the day:
  • Beige Book at 2:00 PM

Directional Bias Before Open:

Key Levels:

• Critical support levels for S&P 500 are 4123.18, 4113.20, and 4099.40
• Critical resistance levels for S&P 500 are 4140.36, 4158.00, and 4169.48
• The key levels for E-mini futures are a break above 4169.00, the high at 2:45 AM, and a break below 4152.50, the low at 8:15 AM

Pre-Open

• On Tuesday at 4:00 PM, S&P futures (June 2023) closed at 4179.25, and the index closed at 4154.87 – a spread of about +25.50 points; the futures closed at 4180.00; the fair value is -0.75
• Pre-NYSE session open, futures were lower – at 8:15 AM, S&P 500 futures were down by -25.75, Dow by -134, and NASDAQ by -110.00

Markets Around The World

• Markets in the East closed mixed – Shanghai, Hong Kong, Tokyo, and Mumbai closed lower; Sydney, Seoul, and Singapore closed higher
• European markets are mostly lower – Spain and Switzerland are higher
• Currencies (Compared to two weeks ago):

• Commodities (Compared to two weeks ago):
  • Energy futures are higher
  • Precious metals are mixed
  • Industrial metals are higher
  • Soft commodities are higher
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 3.572, up +23.5 basis points from two weeks ago;
  • The 30-year is at 3.787%, up +19.3 basis points;
  • The 2-year yield is at 4.208%, up +37.0 basis points;
  • The 10-Year-&-2-Year spread is at -0.636, down from -0.501
  • The 30-Year-&-10-Year spread is at 0.215, down from +0.257
• VIX
  • At 17.50 @ 6:45 AM; up from the last close; above the 5-day SMA;
  • Recent high = 25.21 on March 24; low = 16.34 on January 4, 2022
  • Sentiment: Risk-Off

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

Previous Session

Major U.S. indices closed mixed on Tuesday, April 18, in mostly higher volume. S&P 500, NYSE Composite, and Wilshire 5000 Total Market Index closed higher. Dow Jones Industrial Average, Dow Jones Transportation Average, NASDAQ Composite, and Russell 2000 closed lower. S&P 500 traded in lower volume.

The major indices opened higher and made the day’s high in the initial minutes of trading before turning down immediately. They made lows for the day in the late morning and then moved higher but closed off the highs.

From Briefing.com:

[…] Bank stocks in general were weak today as evidenced by the 1.3% decline in the SPDR Bank ETF (KBE) and the 2.2% decline in the SPDR Regional Bank ETF (KRE). Regional bank losses also weighed on the Russell 2000, which closed with a 0.4% loss. […] The 2-yr note yield was up three basis points to 4.21% and the 10-yr note yield slipped two basis points to 3.57%. Nasdaq Composite: +16.1% YTD S&P 500: +8.2% YTD Russell 2000: +3.1% YTD Dow Jones Industrial Average: +2.5% YTD S&P Midcap 400: +2.0% YTD […] Total housing starts might have declined 0.8% month to a seasonally adjusted annual rate of 1.420 million (Briefing.com consensus 1.407 million), but that was due to a decline in multi-unit starts. Single-unit starts were up 2.7% month-over-month to 861,000. Building permits, meanwhile, declined 8.8% month-over-month, driven by a 24.3% decline in permits for 5 units or more, whereas single-family permits increased 4.1% month-over-month to 818,000. […] Overseas:  Europe: DAX +0.6%, FTSE +0.4%, CAC +0.5% Asia: Nikkei +0.5%, Hang Seng -0.6%, Shanghai +0.2% Commodities:  Crude Oil -0.12 @ 80.89 Nat Gas +0.09 @ 2.37 Gold +11.50 @ 2019.40 Silver +0.16 @ 25.27 Copper +0.02 @ 4.09