Market Remarks

Morning Notes – Monday, April 24, 2023

Sunil Sharma

Directional Bias For The Day:

  • S&P Futures are a bit lower at 9:00 AM, moving up since 2:00 AM – up by more than 20 points
  • The odds are for a sideways to an up day  with elevated volatility – watch for a break above 4161.00 and a break below 4138.50 for clarity
  • No major economic data report is due during the day.

Directional Bias Before Open:

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

Key Levels:

  • Critical support levels for S&P 500 are 4113.20, 4099.40, and 4086.94
  • Critical resistance levels for S&P 500 are 4148.57, 4162.57, and 4169.48
  • The key levels for E-mini futures are a break above 4161.00, the high at 2:00 PM on April 21, and a break below 4138.50, the low at 4:30 AM

Pre-Open

  • On Friday at 4:00 PM, S&P futures (June 2023) closed at 4156.00, and the index closed at 4133.52 – a spread of about +22.50 points; the futures closed at 4156.75; the fair value is -0.75
  • Pre-NYSE session open, futures were mixed – at 9:00 AM, S&P 500 futures were down by -1.50, Dow down by -42, and NASDAQ up by +0.25

Markets Around The World

  • Markets in the East closed mixed
  • European markets are mixed
  • Currencies (Compared to two weeks ago):
Up Down
  • Dollar index
  • EUR/USD
  • GBP/USD
  • USD/JPY
  • AUD/USD
  • USD/CAD
  • INR/USD
  • USD/CHF
  • NZD/USD
  • Commodities (Compared to two weeks ago):
    • Energy futures are mixed
    • Precious metals are lower
    • Industrial metals are mostly higher
    • Soft commodities are mostly higher
  • Treasuries (Compared to two weeks ago)
    • The 10-year yield closed at 3.526, up +23.8 basis points from two weeks ago;
    • The 30-year is at 3.739%, up +19.9 basis points;
    • The 2-year yield is at 4.137%, up +31.2 basis points;
    • The 10-Year-&-2-Year spread is at -0.611, down from -0.537
    • The 30-Year-&-10-Year spread is at 0.213, down from +0.252
  • VIX
    • At 17.51 @ 8:30 AM; up from the last close; above the 5-day SMA;
    • Recent high = 25.21 on March 24; low = 16.14 on November 4, 2021
    • Sentiment: Risk-Neutral-On

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

Weekly:
  • The week ending on April 14 was a small Doji candle near the close of the previous week’sBullish Engulfing candle.
    • Stochastic (9,1, 3): %K is above the %D;
    • RSI-9 is just above 60
  • The week was down -4.12 or -0.1%; the 5-week ATR  is 99.82
  • A down week, second in the last five weeks, and fifth in the previous ten weeks;
  • The weekly pivot point=4138.95, R1=4164.05, R2=4194.57; S1=4108.43, S2=4083.33; No pivot levels were breached
  • Above 10-week EMA and 39-week SMA; below 89-week SMA
  • Uptrend
Daily
  • A small Doji candle after another small Doji candle
    • Stochastic (9, 1, 3): %K is below the %D
    • RSI-9 is just above 60; below 8-DMA
  • Above 20-day EMA, 50-day EMA, 100-day SMA, and 200-day SMA;
  • Uptrend
2-Hour (E-mini futures)
  • Moving sideways to down after breaking below an up-sloping flag, which had been in effect since 2:00 PM on March 9, at 2:00 PM on April 19
    • RSI-21 has bounced up to near 60 after making a Bearish Divergence at 12;00 AM
    • Below EMA10 of EMA50, but above EMA20
  • Bias: Side-Down
30-Minute (E-mini futures)
  • Moving lower since 8:30 AM on April 18, making lower highs and lower lows
    • RSI-21 is near 60 after declining to below 40
    • Above EMA 20, which is at EMA10 of EMA50
  • Bias: Down-Side
15-Minute (E-mini futures)
  • The Bollinger Band (20, 2.0) has been moving up since 5:15 AM.
  • The Bollinger Band has been expanding since 5:15 AM, with the price walking up the upper band.
  • Bias: Side-Up

Previous Session

Major U.S. indices closed mostly higher on Friday, April 21, in mostly lower volume. Dow Jones Transportation Average and NYSE Composite closed lower. Russell 2000 traded in higher volume.

The major indices gapped down at the open. They first rose, then declined, and then again rose to close with little change from the previous day’s close.

For the week, the major US indices mostly closed lower in mostly lower volume. The markets in Asia mostly closed lower, but the European market mostly closed higher. The dollar index closed lower, the energy futures were mixed, the precious metals were lower, the industrial metals were mixed, and most soft commodities closed lower. The US Treasury yields inched higher.

From Briefing.com:

The major indices managed to eke out a slim gain on this options expiration day, but that wasn’t an impressive feat. […]

The 2-yr note yield, at 4.06% shortly before the release, settled the session down one basis point at 4.16%. The 10-yr note yield, at 3.50% before the release, settled up three basis points at 3.57%.

  • Nasdaq Composite: +15.3% YTD
  • S&P 500: +7.7% YTD
  • S&P Midcap 400: +2.8% YTD
  • Dow Jones Industrial Average: +2.0% YTD
  • Russell 2000: +1.7% YTD
[…]
  • April IHS Markit Manufacturing PMI – Prelim 50.4; Prior 49.2
  • April IHS Markit Services PMI – Prelim 53.7; Prior 52.6
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